All Forum Posts by: Mike Kalob

Thanks Sanderson, if you wanna promote or dm me your guy if avail I'll let him know you referred.  I'll keep searching as well.

 Thanks a lot for this detailed tidbit.  I am out of town so will be managing the GC remotely.

The project is around 40k.  I have the capital and the last thing I want to do is offend a capable GC.  I just want to make sure he doesn't abscond is all.

I know I could put a lien on his home per BP podcasts but i don't wanna go that route and just want to find someone reputable.

I've listened to a bunch of podcasts to see it from the GC's end and understand they're just as scared of not getting paid, which speaks to the downpayment.

I guess I just need to lets one go and take my time procuring the guy who'll work with little to no down which seems nonexistent in this market for GC's...

..mind you I have had subs and handymen work for me prior no payment til finished and all went well.. this is a 40k General Congractor job, not exactly a handyman, so maybe my previous wording conflated the 2, as if I were a GC I wouldn't demo until i had some security on a 40k budget as well.

I cant think of any GC on a $40k budget (its a basic rental flip, so not looking for high end materials here) starting demo with zero down unless this is the 10th job with the client.. are we talking of the same budgets? It seems the smaller jobs of a couple thousands are fine paying after job, though once you cross the 5 figure amount, deposits are necessary? 

I should have led with the price tag first to differentiate from sub trades to see if this changes any. Nevertheless thanks, ill keep interviewing GCs..and to avoid wasting their time, ill ask for payment terms initially upfront which I know can be off-putting to many GC's but at least won't be wasting their time.

Thanks guys, I have spoken to about 6+ contractors and the majority want 33%-50% up front.

0 will start work with demo, no fee.  I did get one guy to go as low as 25% of LABOR only costs and I buy materials to start the job.

I'm thinking this is a local market issue?  I'm in North NJ where costs are high and I assume contractors are super busy so can leverage their terms.

The only 'person' I know of who's able to get $0 down is someone who works for a hedge fund and his firm owns hundreds of thousands of apartments. 

Someone from the tri-state hopefully can correct me.  Nevertheless, thanks for the insight.

I'd like my lawyer to add a clause in the GC's contract stating ALL (or majority) materials (ie cabinets, stone countertops, vanity, appliances, flooring, ceiling) are to be purchased before rough inspections.. is this reasonable given below terms of 3 total payments below?

1st - 50% down payment to begin demo work

2nd payment - 25% after rough inspections 

3rd payment - 25% after completion.

My first contractor left mid-job post-pay; what's to stop this one from leaving after 75% of payments?   

If I change the 2nd line to "2nd payment - 25% after rough inspections PASSED and purchase and delivery of all (or majority) of materials completed," should this contractor leave again, at least I'd have the materials in hand to protect myself... That said, I'm not sure what the norm is, so want to be fair.

FYI I think this guy is actually good and means well, it's just the first GC's burn has me maybe overthinking things.  I understand there is currently a delay with materials, so I have to take that into consideration too. I want to keep this guy and want to be fair, but also don't want what happened previously to reoccur.  Advanced thanks.

My Investor is liquid, and I'm moving out of the area.. 

I don't need the capital and would be content at 8% is this too usurious? Don't wanna scare him off.. I'd never consider seller finance given this is a pro tenant state (if eviction ever comes to play), but I know the guy and his balance sheet...

Property is in NY metro just outside NYC [15 min bus in traffic]...

It's a fixer tho hes adept at this as he invests but has too many properties for a normal mortgage despite his high income and liquidiy, thanks.

One peril was vandalism (covered under policy) and another sudden accidental peril (also covered).  The agent mentioned I'd have to pay 2 deductibles which I'm fine with, so I ask if I get paid out twice my coverage $15k per claim on the same property = $30k.  He said yes, but now the adjuster (not public and chosen by insurance), wants to limit it to one coverage to one payout "since despite it being 2 separate claims, it was discovered on the same property at the same time."

Does this sound right?  I'm in NJ and understand each state is different, thank you.

So NJ is known to be pro-tenant, but I've heard from some investors some towns are better than others.  

For instance, I hear Jersey City courts lean to the landlord (relative to other NJ towns) since the town is growing so fast and courts can't keep up with all the frivolous filings, and the mayor is pro-development whereas towns like Union City are very anti-landlord due to gov't keeping its majority voting block comprised of tenant-lifers in rent-controlled buildings. 

From my buddy out west, despite CA getting a bad wrap for being pro-tenant, he noticed how much better San Diego was than LA as a landlord. 

I presume town size in NJ plays a factor as well, though it may be secondary.  Would shore towns lean toward landlords given their seasonal rentals which bring a ton of $$$$ from bennies?  Thanks.

I get the concept (number of days, etc), but how was the operational aspect?

- Were you audited which seems very likely with 1031s?

- Is there a huge delay in filing taxes since the 1031 admin has to liaise with your accountant? Can you even efile?

- Upon sale of the asset down the line, are you in a higher position to be audited given they may ensure you are using lower basis or is it the same as every other return after the 1031 is over?

It seems many 1031's fail given the requisite of a short timeline sale/purchase but just wanted to hear those lucky enough to do it, thanks.

Thank you

Hi Eli, they we had a 1 year lease but that expired  2 years ago, so I assume we're now month to month?  Thanks.