All Forum Posts by: Kevin Castaneda

Hi @Dali Suarez,

Congrats on wanting to take action as that's the most important step! What level of flip and what part of San Antonio are you looking at? I'd highly recommend choosing a part of town that is fairly close to your residence as you'll be making a lot of trips. 

I subscribe to several wholesale company's lists and the majority of the deals I've seen that come through those channels are very lean... especially if you're looking to do a cosmetic rehab. I'd caution you about their "rehab" costs as these could be off by more than 50% (I know from experience!). Don't forget the utilize the 70% percent rule and to subtract your rehab costs to determine your purchase price.

Using independent wholesalers may give you the opportunity to find better priced deals, but you'll have to do much more leg work to qualify the leads as these groups will not hold your hand as much as the aforementioned. I've found that The Book on Estimating Rehab Costs by @JScott to be fairly relevant in our area. I'd also highly recommend building a spreadsheet to help calculate and factor in ALL costs of the project such as closing/double closing costs, holding costs, rehab costs, staging costs, and resale costs. It can be very easy to make a bad deal look good if you forget some of these costs so plan accordingly. You might have less than a day before needing to make a buying decision so having inspection checklists on hand when you see the property and other tools/spreadsheets will help boost your confidence in your decision.

Most investors around here appear to be using to be using Alamo Title for title/closing. I can share more specific details and some lenders recommendation if you PM me.

Hi @Michael Guzik, I'm glad you're asking this question as it a huge issue... It shows you want to do things the right way for yourself and your buyers. As @Caleb Heimsoth recommended. I'd second getting your real estate license. This will allow you to provide more accurate home sale comps in order to determine the ARV. This will not only protect your bacon when buying properties from distressed homebuyers, but will also give confidence to your investor-buyers that you're not just making up numbers. Many inexperienced investors do not have their real estate license and are relying upon you to gauge the ARV. How do you think they'll feel about recommending you if the house appraises for 30k less than ARV because they took your word? At least with a real estate license you can share the comps with them so they can make their own somewhat informed ARV opinion...

@Timothy Roberts, good on you for wanting to take action! It's so easy to get stuck in analysis paralysis (I know from experience!)... Some initial questions I'd have are:

1.  What experience do you and your business partner have in real estate investment?.. I wouldn't recommend long-distance investing without having done the same type of strategy on a local scale first to understand the process intimately.
2. How will you manage the BRRR? Do you have construction experience or will you be using turnkey provider?
3. Do you have any trustworthy contacts you can rely upon in either of those markets with whom you could partner?... Unless you're willing to fly out every weekend, you'll be heavily relying upon new contacts to be your eyes and ears. Having someone you trust on the other side will help prevent miscommunication and ensure you don't get taken advantage of... This would be a more important factor to me than simply picking the "hottest" market.

I'm rehabbing a single-family house less than 30 minutes from my home while still working a job, and have been almost overwhelmed by the difficulty. I can't imagine the complexity of managing a business and investing long-distance... especially not as my first endeavor. 

Hey BP friends,

Backstory:

I'm in process of rehabbing a 1920s house in San Antonio, Texas, which has a cedar post pier & beam foundation. The house is 1600sqft total with a second story being only 500 sqft. The foundation is very level despite its age. The foundation beams are all 4x6" treated beams and one small interior section of the foundation has 4x4" beams.

In San Antonio, an engineer's assumption of the foundation design and subsequent inspection is required in order for the city to issue a foundation permit. I've had several foundation repair companies provide their estimates and some estimates also included the cost of the engineer assumption... It was recommended to me to have my own engineer perform the design, that way I could take their plans to any foundation repair company and get an apples-to-apples comparison.

Thinking this seemed like a good plan, I paid $500 for the engineer's foundation inspection and $200 for them to design the repair. This engineering firm has experience with foundation repairs and was recommended by a local foundation company.

Dilemmas:

The engineer's report says the cedar piers show signs of water damage/decomposition indicating they should be replaced.

They also say the beams are undersized and should be upgraded. The recommendation is 53 new 12" diameter concrete poured piers. The recommended average beam size is (3) 2x8" with the largest being (3) 2x10".

Before sharing the engineer's report, most companies quotes were around (45) 8" concrete piers for $12,000... These companies also pull an engineer's assumption of the design (...which I'm not sure how they manage to do that since it doesn't look up to code???)

When sharing the engineer's report with the foundation companies, one company said the largest beams they normally do are 6x6 and that any larger is overkill (p.s. these guys normally pull permits as well). That company quoted me $18,000, and this was only using 6x6 beams on part of the foundation, not a full beam replacement.

Another well-rated foundation company (who recommended the engineer) recommended not doing anything since the foundation is so level. I've also had contractors recommend that unless the engineer says the foundation is condemned, then the existing foundation has more life left in it.

I feel stuck trying to figure out what should to be done, to what specifications, and whether by not repairing the foundation it would derail the home sale? Any recommendations on a course of action would be extremely welcome!

Considerations:

1. Would the average person buy a 1920s house that hadn't had the foundation updated?
2. Will the home inspector get under the foundation and ask for an engineer's report? 
3. If we did nothing, I'm concerned about having to perform the foundation repair on the back end and whether that would screw over the new drywall/painting, re-hung doors/windows, and bathroom tile work all just done to the home?
4. How would you handle this foundation repair?

The Code:

It seems most states uses the 2015 IRC guides for residential construction. Unless I'm reading the it wrong, it sounds like these would be the appropriate code sections for the beam/girders and that in terms of sizing the engineer is correct.

https://codes.iccsafe.org/public/document/IRC2015/...

• R404.1.9.2 - Masonry piers supporting floor girders
• R602.7(1) - Girder Spans and Header Spans for Exterior Bearing Walls
• R602.7(2) - Girder Spans and Header Spans for Interior Bearing Walls

@Rick Pozos, The house is in the RIO district so the Office of Historic Preservation (OHP) has jurisdiction, but they don't review residential homes in that overlay district. They still have to sign-off, but they don't review them. I'd be happy to keep the wood windows if there was a way to repair them cost effectively and energy efficiently... I figured doing it that way would have some huge labor costs associated.

@Account Closed, I wasn't planning on fully replacing the exterior vinyl as it looks in alright condition except for a few chips in a couple places that I might spot treat. With the wood exterior underneath the foam, I don't think the stud cavity will have moisture problems?

Thanks for your input, @Greg H.! I misread the SABOR Association dues. They're "pro-rated monthly"... not monthly. Haha, that changes things significantly! I've updated the table and yep that fits with around your numbers.

The actual numbers can still be found in the websites I linked above.

@Jason Vo , How do the costs I listed compare with what you're paying for to keep your license active?

@Roy N., Thanks for the detailed walk-through. Not sure what kind, but the house does have foam board installed on the exterior between the vinyl and exterior shiplap. 

@Account Closed, @Rick Pozos

@Brian Pulaski , That's a good clarification! How would you handle the replacement glass? I'm planning on replacing the old wood frames with new vinyl windows as I'm thinking that will be much cheaper than the labor of repairing and putting new glass in old frames? The house will be on the middle-higher end for the San Antonio market (250k+), but I don't want to shoot my cost of windows through the roof as I'm doing over 30 of them. Not sure where the "glass ceiling" is where vinyl becomes a non-option...

@Andrew Kerr, @Mike B., Thanks guys! Sounds like you both approach this a similar way. Right on!