All Forum Posts by: Kurt G.

That's an interesting idea and I am curious what others have to say, but my first thought is that the homeowners stand a good chance of making the experience a living nightmare...  We have purchased houses from hoarders, heavy smokers, and some who frankly lived in squalor.  If they let their houses fall into massive states of disrepair with their own equity on the line, I can't imagine they would be likely to suddenly change their ways so that the house could be properly rehabbed and shown - especially with your money and time riding on it.  

Three other concerns that come to mind are 1) They want to make decisions on or be heavily involved in the rehab, 2) They are uncooperative with contractors, 3) They like the results of the rehab and decide they don't want to sell after you've put your money and time into the project.  All of that makes me wonder if it would be possible to write a contract that could possibly cover all of the potential pitfalls.  If the house was unoccupied with owners who are out of state, trying to settle an inherited property, or a tired landlord, then maybe (???) with a rock solid contract and advice from someone who's done it, but no way I would ever consider it with live in owners.

This is a classic case of trying to separate personal tastes from what gives a kitchen the most "Pop!" and help sell a house fastest and for top dollar.  Nothing appeals to everyone, however among the following, my wife and I have a strong preference over the personal  'yuck' factor in of the other.  We are starting to partner with other investors on projects, so the topic of finish comes to the table from time to time. 

Most of our flips are in the slightly sub-median range, although I am about ready to start on a second that will be north of median for the Louisville area.  For the sub-median houses, we feel that a backsplash is a relatively inexpensive add that makes the finished product stand out in the neighborhood.  So, without further ado, and in no particular order please tell me which of the two have the widest appeal and pop based on your recent flips, leaving personal preference out as much as possible...

• 3x6" White Subway
• Glass / Stone Mosiac

Thanks!

-Kurt

I logged on to ask exactly the same question...  A mortgage lien and note are surely only one way to handle private money, especially when taking a loan from family / friends, or when a private money lender wants you to keep the loan out for subsequent flips.  I have several private investors lined up with three properties under contract, and am very interested what options are available.

I'm a couple of weeks from closing on my first rental, and have been thinking about smart upgrades, but I would want them for me instead of the renters.  For example, a Smartthings hub with various sensors that would alert me immediately to water leaks, temperature extremes, frequency of furnace filter changes, and access gained to off-limit areas to name a few that come quickly to mind.

The problem is that I really don't want the expense of providing internet & wifi, which would leave the renter's wifi as the only way to connect.  I have doubts that this could be required in the lease, and I think the idea of me having remote access to their stuff could make come people concerned about privacy.  The only way might be to provide basic internet service to tenants at a discounted rate, essentially splitting the cost.  Any ideas on how to manage this?

I sure don't miss making payments, and I can flat out tell you that my tax deductions never exceeded my payments.

The main question I'm asking is whether this is the best way to structure our plans?

Now that my wife and I are hooked on REI with plans to grow our business, we have been thinking about how to use it to help our children. We don't want to just give them money from our flips, instead we want to 'teach them to fish', so to speak. One is 28 and married with a 1 year old, the other turned 15 today, and we are now investing part time under an LLC.

What we've been considering so far would be to open a (joint?) savings account for each of them, and deposit maybe $1,000 to each of their accounts from each successful flips we complete. In the beginning, they would be welcome to use that savings to act as private money lenders for our future projects. Assuming we stay in the game long enough, there could eventually be enough for them to use the money to seed their own real estate investments, and we would coach them through the process. I could foresee the older one doing a flip, and the younger one using the funds to house hack his way through college. How to minimize tax liability through the process is a bit unclear to me. Although they would have no legal obligation to use the money for REI once we 'gift' the money to them, we would like to see them use the money to acquire assets of their own.

Please give some honest feedback on this idea, or if you can think of a better way to giving an teaching.  It would be great to hear any stories from other investors who've done something similar.

Project management is important if you plan to rehab, even if you plan to use general contractors. Business processes are also critical. Learn when and where a process is necessary, how to design and implement a process, and how to make sure it sticks after you put it in place. "Good" processes will increase efficiency and mitigate potential pitfalls. Bad processes will create red tape.

Weird - why all the special "A" characters in my post?  They don't show up when I try to edit the post...

We are current working on our third using our home's equity. Some will argue against risking your primary residence on an investment, however we mitigate risks through due diligence and by playing the numbers conservatively. We furthered our protection by creating an LLC before starting our latest project, and funds are always moved to our business account before spending a penny on anything related to the flip. Beyond that, we had to consider whether we would be able to cover the HELOC long term if the flip was a complete disaster. We have no intention of going there, but could if we had to.