All Forum Posts by: Jonathan A.

@Rochelle RayThanks for this input Rochelle. I Agree with you 100%. I value time a lot. We have one contractor sending a bid and have another 2 coming the next few days. your referral would be great. If you can lead us to a good GC, we would like to contact them and mention your name if you dont mind. 

@Trista Fennerhey there. Yea, we dont mind getting our hands dirty and get some labor going. We are just not sure of doing the demo ourselves is a smart idea because we have no experience on rehabbing a “building”. The other concern is that if we do it ourselves, is there a chance that the GC would say, you guys didn’t do this right and would delay even more time, and worse, would pay for demo anyway.

@Lee Ripmamy concern is that we do the demo and eventually still hire someone to demo because it wasn’t demo as it should be. Obviously we are amateurs. LOL. IS it possible that the GC would say this thou? How hard is demo-ing a building? This is a 6-Plex by the way.

@John Leavelle

Thanks for this input. 

Disregarding insurance, our strategy:

1. Bought the property 41k cash, no loan, closing included.

2. Quote of rehab is 255k, but me and my partner will try our best to bring this down by doing the demo ourselves, buying materials ourselves. Having the professionals do the hard stuff thou, electricity, AC, plumbing, etc. 

3. ARV 430, but lets say conservatively 400k.

4. @ 400k ARV, the LTV @ 75% is 300k. @ 70% 280k.

5. Strategy will be to BR, hold and cash flow for the next 5 years possibly. The area is up and coming, location is good. 

@Account Closed

Hery lance, hi Lee, nice to meet you guys here. We are thinking of doing the demo part and material buying. We’ll get the professional do the hard stuff such as electric/Water/plumbing, etc. Lance, Lee, what do you think of us doing the demo? It’s a six plex burnt house, kinda big demo. Can you give us the pros and cons if u have any ideas. Our main goal is to significantly save on rehabbing this particular project

My partner and i needs your advices on how we can save on our first commercial (six plex) apartment rehab construction in Kansas City, MO, Any advise?

@Josh C.

Hey josh. Thanks for your input. I also have that feeling this would be the case. Would you be familiar about depreciation repayment as the fire was since December and i have researched that sometimes/more likely the new owner can claim depreciation payout because the prosperity have been sitting empty since december 2017 (since fire occur)  and under more damage from weather, etc. It’s kinda hard for me to believe but this was based on Missouri independent insurance commision. How true is this? Any thoughts?

Rehab bid just came in today 255k, arv 400k.

we ar thinking even if we do not get the claim., i believe we are still on the upside. We are preapproved already for the rehab loan (which is pretty hefty 10% interest only) 12-24 months, no prepayment penalty. 

@Hadar Orkibi

The property is being sold as is 40k which is the land value. The option that we thought would be the same as u mentioned, to underwrite on the contract that any remaining amount from the insurance will be passed on to the buyer which is us. What you think?

@Hadar Orkibi

Hi Hadar. This is a good idea. I would do as you recommended. Have u encountered anything like this?

@Hadar Orkibi

Hi Hadar. 

There was 150k paid by the insurance to the previous owner to cover the mortgage only and nothing more. So the property is paid off. but the entire policy 650k was not paid out completely and the property damage repairs have not been completed. I assume the remaining funds available will be going to us to continue the project. I’m not sure if this is the case. 

@Matt Crawford

Hey Matt

Congrats on your first rehab. ME and my team are just in contract with apartment building in Kansas City, MO. We would have a full major rehab as the property we acquired is a fire sale. May i know where u got your construction loan? Thanks Matt