All Forum Posts by: Joel Forsythe

Quote from @Jessica Edmond:

I paid him 20 k deposit and then paid him for all work once it was complete.  I do owe him 5k and told him the checks were ready for pickup but still no response 

1- You hold that 5k until…
2- Review the details in your contract, specifically Scope of Work, release payment descriptions
3- Review contractor default or termination clauses or language in contract
4- Review permit status with municipality, if permits were pulled. Final or Incomplete? Name on permits match the GC under contract or were subs used to pull permits. If Subs pulled permits, and they are not complete, you will need the contact info for the subs used.
5- Perform a photo documented site inspection, written detail of unfinished work directly covered by the language/scope of work description in your contract. 
6- If permits are complete, signed of as FINAL, no further inspections required, then solicit an estimate from another contractor for the list of unfinished work. Compare that estimate to the $5k withheld from default contractor. 
7- Prepare a delivery of the documented unfinished work, written detail with photographs, a copy of the replacement contractor estimate, with a termination notice certified mail to the default contractor. Review the contract for terms and procedure for default, if any are written.
8- Keep a copy of their refusal to complete the work as Contractor Default, keep the final $5k as contractor default.
9- Pay the new contractor to fish the job, let the Old contractor deal with trying to get the last 5k from small claims court, which they will likely fail to achieve.

PS yes I blew past “what if permits are not signed off as complete” thats a PITA of its own thread.

Quote from @Shelly Byce:

@Joel Forsythe, we are absolutely doing that. Going to get everything hammered out with a real estate attorney. We (construction side) already have an LLC in place, and our friend will form one as well. What did you mean when you said, "I would never do this if I wasn't involved in the investment side…" Are you speaking from an investor perspective or contractor? Sorry, still learning the verbiage 😁

I would never deliver wholesale line item level details to just any "customer".  Let alone line item level details about overhead and salaries.  The only benefit in this instance, as an investment partner in a JV, or member in a multi-member LLC, is it's an act of "good faith" on my part in the agreement, being extremely transparent about the project's costs for the construction company, and the specific amount the partner/member invoices as profit or salary attributed to construction services on the specific project (I differentiate profit from salary, as it depends on the size of your construction company, a smaller company the profit may be the salary etc).  You need that level of clarity and bookkeeping if you are operating in both the investment entity as well as the construction entity simultaneously. 

Shelly, first and foremost, starting out correctly with clear, SEPARATE, entities is very important. You should start getting referrals for an attorney to help you organize the structure and language for your described arrangement.

I would absolutely recommend the Investment LLC be 100% separate from the construction entity. Way too much liability in construction to expose the holdings to. Have your husband( as owner, ceo, whatever) of the construction entity agree to perform Cost-Plus contracts with the Holding LLC, as an outside contract. Organize standard line item for invoices for project expenses, but have him break down all the administrative/overhead line items that are being reimbursed, likely in a prorated fashion ie weekly or monthly percentages. His salary would be represented as a portion of that breakdown. This level of transparency will allow for very clear auditing by any member of the Investment LLC, as to what the construction owner is clearly profiting on the project aside from hard costs of the project. As an aside, I would never do this if I wasn't involved on the investment side. In the future, you've already built in a transparency of the monetary value for the contractor position, should the salary be "waived", "discounted" or "delayed-til-closing" as an added investment element. I have used this successfully, and have leveraged the transparency for a "piece of the action" when I felt strong about the prospect of the project. Not much of a value on small budgets, but if you start contracting well into the six figures and higher with the holding entity, it's real money.

Unfortunately, it’s likely getting to the diaphragm between patios- deck/ceiling. Too soon to probably see exterior evidence, but it’s obviously traveling in a cavity to the wall above the header/ drywall exposes moisture quick. Over time, there should be evidence in whatever the ceiling covering is over 2nd fl patio. Look for any evidence in 2nd floor interior ceilings for moisture, check interior  areas in unit directly above along the baseboards, flooring in unit above, drywall dampness anywhere in 3rd fl unit. In none, my money is patio diaphragm ceiling to wall transition, inside wall intrusion.

It’s a little hard to visualize, is the 2nd floor patio door lead to a covered patio, or is it fully exposed exterior wall? Does the 3rd floor patio cover the 2nd floor interior or simply stack on the 2nd floor patio?

My assumption is if 2nd floor patio door has overhang coverage, that’s a hard/steep angle of direct rain intrusion above the sliding door.  I’d be looking at every flat surface of collection above, all the way to roof.  Stand at the point of water evidence and look up, 45degrees in any direction, that’s your starting, gravity based points of entry and travel. Once inside the walls it can simply sheet down the voids on the backside vapor barrier.

Quote from @Tom Server:

Quote from @Joel Forsythe:

Quote from @Tom Server:

"Buyer to receive $5000 credit at closing, Buyer agrees to replace subfloor with 3/4 plywood, mildew resistant and sound proof flooring insulator"

.. the actual subfloor is fine but its in the contract to install new subfloor anyway

This makes no sense, unless it’s a soundproofing condition mandated by the co-op. Any detail you google about sound-proofing floor assemblies are going to show you a build up of way more than 3/4”. I suppose even a 1/4” layer of sound dampening membrane is better than nothing, but why on earth would replacement of the entire subfloor be required?  

You said it’s a rehab, is it completely gutted, no cabs no existing floor finishes? Why would subfloor “replacement “ be in the conversation?

Thats what the HOA/Management wanted. The property must of had some leak.. right now on the floor is a sound deadeding underlinement, that seems moist.. The HOA is concerned with noise, so thats what they want and are offering 5k towards replacing the subfloor, I also have to install Quietwalk underlinement 
https://www.homedepot.com/p/QuietWalk-360-sq-ft-6-ft-x-60-ft...

Ok, now you’re getting clearer. Subfloor can be misinterpreted. Are they just talking about the damp membrane layer as “subfloor” ? Because as a builder, the actual subfloor is quite serious to talk about redoing - there’s no “just pull it up and replace it” assuming there are interior walls in there. Is this a framed wood floor system? Post tension slab? 

if they just want the membrane out, dry out the existing sub, then put new soundproofing in, then the 5k might be just fine. If there’s actual diaphragm subfloor decking that has to be removed and replaced, there’s gonna be hidden conditions you can’t predict fully.

Quote from @Tom Server:

"Buyer to receive $5000 credit at closing, Buyer agrees to replace subfloor with 3/4 plywood, mildew resistant and sound proof flooring insulator"

.. the actual subfloor is fine but its in the contract to install new subfloor anyway

This makes no sense, unless it’s a soundproofing condition mandated by the co-op. Any detail you google about sound-proofing floor assemblies are going to show you a build up of way more than 3/4”. I suppose even a 1/4” layer of sound dampening membrane is better than nothing, but why on earth would replacement of the entire subfloor be required?  

You said it’s a rehab, is it completely gutted, no cabs no existing floor finishes? Why would subfloor “replacement “ be in the conversation?

Since it’s a personal question:

Option A- I’m married to her. I’m not stupid.

Real estate is local…

Quote from @Marcus Auerbach:

Well said @Joel Forsythe.

We do a lot of buyer representation and I have always felt it was unfair that an experienced agent with deep knowledge gets paid the same as a rookie, who basically opens the door and fills in the blanks. 

That’s not entirely true, I know experienced agents earn/negotiate better commission splits with their brokers (or get lured by other brokers) aside from just volume sales. You may be touching on a significant issue with brokerages though. One might ask if brokerage managers and transaction coordinators are performing enough oversight and auditing of the new, rookie agent’s transactions, AND communications with clients. The whole point of newbies getting the worst commission split with their brokerage should be seen as more effort needing to be made properly educating them across the board, not just sales “rah rah, go get ‘em kid!”

I agree it’s an unacceptable low bar to enter the profession, made worse with no further serious educational bars to leap. Raise the bar, but education and oversight for new agents should be higher. I know many brokerages offer various sessions, but it’s not mandatory that agents attend.

Quote from @Bruce Lynn:

Lawyers 1  Consumers 0.  From what I understand the attorneys will get about $500,000,000, the class action plaintiffs about $800 each.  There are savvy buyers, and then buyers who only buyers 1 or 2 homes in their lifetime.  Those may have to go unrepresented like it was in the 1970s and before and many got hammered in the process.   Personally I think representation for buyers is great.  Even though i can work all over Texas, I don't know much about real estate in Austin, Houston, El Paso, Amarillo or most parts of the state.  If I wanted to buy property there, I would certainly get represented and pay for it if I had too.

Commission were never set and have always been negotiable....more and less than x%.   

If there are any lessons here, it is to send your kids to law school and have them study really hard and identify cases with huge payouts.

Tru dat on law school. That and nursing- Americas final economic engines at the end of days ;)

I’ve enjoyed following this discussion as a spouse of an 18+ years realtor pro, who reps buyers and sellers, ethically, profitably, and deservedly of her success.

America is litigious

Americans in commerce are self centered

Dual agency is the next “industry shattering” class action lawsuit in the making

Separate representation in major asset acquisition is simply common sense for the masses, the industry evolved to accommodate that.

Some ignorant or selfish Americans abused the system? ‘Burn them down, they’re all witches!!’ Man, humanity is predictable.

The current news hyperbole is free-spinning existential nonsense re: extinction level agency event in the making- realtor survival rates are/have been akin to baby sea turtles, so now what? Arguments are now like “kill ‘em on the beach, why let them reach the water”

Reports of major, multi-million, billion? dollar combined level industry player's (NAR, lobbying groups, nationwide realty cattle brokerages) imminent death, are greatly exaggerated. Anyone that thinks they are simply going to slit their wrists from this suit, and walk away from decades of business development over this expensive, but fundamentally administrative tweak, are simply delusional.

There will be a counter spin, PR campaign eventually, to assert there is no ridiculous nationwide anti-trust conspiracy screwing home sellers. Sure, casualties of a media war muck up what is common sense- convince the ignorant that they should simply go it alone with no rep (where’s the eye roll emoji) or (are are you kidding me) ask the scorpion (seller agent repping a buyer) if they need a ride across the River?