All Forum Posts by: Josiah Halverson

@Patrick T.

You're advice has been super helpful! I hope to return the favor some day.

Thank you all. Sounds like I need to focus on tapping into potential private lending as a backup option. For less risk on their part, I may be able to just borrow $10k from 10 different people or something to that effect. Who knows, maybe it will even work out that I can skip the hard lender all together. That would be nice.

@Sharad M. $250 paid by myself may be high if it is for a GC I've worked with before and is likely to get future work. But my feeling is that I should be willing to pay more for something that has such a huge impact for the rest of the project. I will be using contractor A's estimated costs and schedule to come up with my maximum offer amount. Once an improvement plan is made, I bid that out to several general contractors (including contractor A). I pick the one I feel is best to complete the project. That would be contractor B. So I think you've helped me answer part of my own question. Contractor B's expenses are already included in the total cost of the project.

@Tom Brunell It's a double edged sword I guess. You make a good point. With bidding wars, maybe there's less sense of loyalty between investor and GC, but I don't know any GC's well enough to be loyal to any of them yet. One huge advantage to bidding is that it keeps everyone competitive through checks and balances. I've seen problems with sole sourcing in my industry when we as a utility hire many contractors. Fees creep up for the ones that get sole sourced.

@Patrick T. Thanks for the advice. I will definitely ask those with experience for GC referrals. You said that you as a GC would make a proposal for an investor differently than a private remodel. How do you mean? As for your last few points, I agree that each bidder should get a walk through with me (and the initial contractor, contractor A) so that they can get a full understanding of the project. Does that seem like a good idea? Any other suggestions? My predicament is that I can't rely on myself for accurate estimates and I have a separate full-time job so I really need to rely on general contractors.

Thanks @David Niles . Let's assume I bought right, lowered the price and it's still not selling (as unlikely as it might be).

What are a few possible exit strategies when I rehab, can't sell, and want to mitigate holding costs? I'm a new investor and want to have few back up options just in case I have trouble selling. Assume I have a loan with a hard lender, my credit is not good, and I work a separate full-time job. Any suggestions is appreciated!

Way to add value to a community @Kevin Dickson ! Such a great way to approach investing that gives life more meaning. Wish you the best!

How much can I expect to pay for general contractors?

Let's say that prior to making an offer to buy a rehab, I hire contractor A to do an initial walk-through with me and come up with a detailed improvement plan (cost and time schedule).

Next, I send out bid requests to both contractor A and other contractors for that job. Contractor B wins the bid and his responsibilities will be pretty much everything because I have a different full-time job. My understanding is that I should expect to pay contractor A roughly $250 for the walk-through, but how much do I pay the bid winner, contractor B? Is it a certain percentage of the total improvement cost or something else?

Thank you for your input!

What you all have said is great and it pertains to the specific situation @Dustin Faeth is in, but is there something we can learn from this to make future projects better?

I am coming from a novice standpoint so I am purely inquiring, but isn't the best solution to nip it in the bud right from the start with detailed scopes of work and contracts? If there is a clear understanding between all parties of what is expected and what the consequences are when breaching contract then this provides a few good things:

1. It prevents you from entering a deal with potential problems.
2. It helps point out who is to blame in a dispute. In the case where the GC is to blame and he knows it, he would probably be less likely to spread bad press about you.
3. And it gives you better ground to stand on if taken to court

How do you guys feel about this? Easier said than done? Not practical to account for all possible scenarios?

Thanks @Holly Baldwin ! Congrats on the new accomplishment! With the benefit of her having MLS access and the benefit of her training, experience, and future contacts, it seems smart to me to have her as my agent. I will definately disclose us being married in each deal. Thanks for the advice. So would the disadvantage be a missed opportunity because the other party doesn't like that we're married? I could see a conflict of interest arise if she were to act as the buyer and seller agent at the same time. Is that what you and @Jerry W. are getting at?

Jerry, I am definately NOT considering divorce (nor death, nor disability, nor getting locked up, nor exile, etc.). I'm just thinking of the countless times I have heard that one should plan for those things just in case. I would imagine it all could be lined up in a business partnership contract up front or something.

Rehab, sub2, & rental business startup in Utah: Is it a good idea for my wife to get RE license and act as my buy & sell agent? Is it legal? What issues do I need to be aware of that addresses profits shared by married partners, and how to handle separation, divorce, loss of ambission, and other unforeseen events? Thank you for your time!