All Forum Posts by: Lance Turner

That's an exciting step forward—moving from doing your own cosmetic rehabs to managing a contractor is a big milestone, especially as you look to scale up and either flip or BRRRR. Since you've already had experience with hands-on rehabs, you're not starting from scratch—you've got a solid foundation and a good eye for what needs to get done. Now it's just about learning how to communicate those needs effectively to contractors and manage the process efficiently.

The first big key is developing a clear and detailed scope of work (SOW). You want to break the project down by trade—things like demo, electrical, plumbing, HVAC, roofing, exterior, and interior finishes. Be as specific as possible. For example, instead of saying “replace vanity,” say “install 30” white shaker-style vanity with brushed nickel faucet, materials provided.” Also, clarify whether you or the contractor is supplying materials. Vague scopes tend to lead to miscommunication, inflated bids, or change orders later on, which can be frustrating and expensive.

Once your scope is locked in, get bids from at least three contractors and ask them to quote off your itemized SOW. This way, you can compare apples to apples. When bids come back, pay close attention to outliers—if one contractor is way higher or lower than the others, that can indicate either padding or misunderstanding. High bids aren’t always dishonest, but they might include built-in markups or assume more labor than necessary, especially if the contractor plans to sub everything out.

It also helps to build a materials budget spreadsheet based on what you typically buy and what it costs locally (from Home Depot, Lowe’s, or regional suppliers). That way, if a contractor quotes $450 for a toilet installation that you know only costs $125 for the toilet itself, you’ll know to ask follow-up questions. Understanding material costs gives you more leverage and clarity in your conversations.

When it comes to payments, ask for a line-item draw schedule and tie payments to project milestones, not just time. For example, you might structure it as 25% after demo, 25% after rough-ins, 25% after finish work, and 25% after a final walkthrough. Avoid giving more than 50% up front—some contractors will ask for a small deposit to get started, which is fine, but you want the rest to be performance-based to keep the project on track.

It’s also incredibly helpful to walk the property with your contractor before finalizing the bid. Go over your scope in person and get their feedback—but don’t let them completely rewrite your project unless there’s a good reason. This walkthrough is a great chance to assess how they communicate, how detailed they are, and whether you feel comfortable with their approach. If a contractor is vague about pricing or avoids answering direct questions, that’s often a preview of what working with them will feel like.

A quick bonus tip: for major systems like roofing or HVAC, it’s often better to get separate quotes from specialists rather than bundling them under a general contractor. You’ll usually get better pricing and more accurate information. 

Note: This information is for educational and informational purposes only and does not constitute legal, tax, financial, or investment advice. No attorney-client, fiduciary, or professional relationship is established through this communication.

Hi Lance, we are developing a project that is partially in a flood zone also. We are developing as RV /campground - tiny homes on wheels - where is your property?

1. Durable Furnishings: When it comes to minimizing life cycle costs, focus on quality over quantity. Some of the best sources for durable furnishings at reasonable prices include:
   • IKEA: They offer modern designs, and some of their higher-end lines are surprisingly durable.
   • Costco: Their furniture tends to be both stylish and durable, often at great prices for the quality you get.
   • Wayfair: Offers a wide range of options, and while not everything is long-lasting, their customer reviews can help you identify durable pieces, just use more caution. 
   • Facebook Marketplace/Craigslist: Sometimes, you can score great deals on gently used, high-quality furniture that’s built to last.
   • Local furniture outlets: Some cities have outlets with overstock from larger brands at reduced prices.
     Minoan: This website is free and offers discounts from higher end brands like west elm, crate&barrel, polywood and 150 other brands. Worth getting an account!
2. Avoiding Conflicts Between STR Guests and LTR Tenants: Communication is key here. A few things you could consider:
   • House Rules: Make sure you have clear, firm house rules for your STR guests regarding noise levels, shared spaces, and respecting the privacy of your LTR tenants.
   • Noise-cancelling measures: You could invest in things like soundproofing the walls or adding landscaping (like thick bushes) along the privacy fence to further dampen any noise between units.
   • Separate Access: If possible, ensure that the STR and LTR tenants have separate entrances or parking areas. This can minimize interactions and potential friction.
     
     I operate a LTR and STR in the same building, and honestly its been great and its nice to have a set of eyes on the place 24/7 that can alert me if there's something wrong or an issue. Just be open with what your doing and why your doing it. 
3. Protecting Against Bedbugs: Bedbugs can be a nightmare for STR hosts, but here are some proactive steps:
   • Mattress and Box Spring Encasements: Use bedbug-proof covers on all mattresses and box springs. I get these from amazon. 
   • Regular Inspections: Frequently check for signs of bedbugs between guests. Educate your cleaning staff on what to look for (tiny dark spots, eggs, etc.).
   • Heat Treatment/Preventative Measures: Some STR owners do periodic heat treatments or hire pest control companies for preventative maintenance. I dont do this, but it is an option.
   • 
     Id also call some local pest control and they can spray quarterly or monthly to help and prevent bedbugs so they die 24 hours within contact of the stuff they spray. 

Good luck with your first STR—sounds like you're already thinking ahead on how to set it up for success!

When approaching the seller about seller financing, especially given the unique nature of the property and potential challenges in selling it, it's essential to frame the conversation in a way that highlights the benefits for both parties. Here’s a step-by-step approach you can take:

### 1. **Do Your Research**

- **Understand Seller Financing**: Familiarize yourself with the mechanics of seller financing, including how it works, the benefits for sellers, and the risks. This knowledge will help you answer any questions the seller may have.

- **Market Analysis**: Gather data on the local market, including comparable sales, average days on the market, and trends. This will strengthen your position when discussing the property's value.

### 2. **Schedule a Meeting**

- **Set Up a Face-to-Face Meeting**: If possible, arrange to meet the seller in person. This creates a more personal connection and allows for a better discussion about the property and financing options.

### 3. **Build Rapport**

- **Acknowledge the Seller’s Situation**: Start the conversation by acknowledging the seller's desire to move further out and his long-term ownership of the property. Express understanding of his position and why he might be looking to sell.

- **Discuss the Property’s Unique Aspects**: Talk about what makes the property special and your appreciation for it, but gently introduce the reality of its market position.

### 4. **Introduce the Idea of Seller Financing**

- **Present It as a Solution**: Frame seller financing as a creative solution that benefits both parties. You could say something like:

- “Given the unique nature of this property and the current market conditions, have you considered seller financing? It could help attract buyers who may be hesitant due to the price point.”

- **Highlight Benefits for the Seller**:

- **Quicker Sale**: Explain that seller financing can make the property more appealing to potential buyers, increasing the chances of a quicker sale.

- **Income Stream**: Discuss how seller financing can provide him with a steady income stream while still retaining ownership of the property until the loan is paid off.

- **Tax Advantages**: Mention potential tax benefits of seller financing, as he may be able to spread out the capital gains tax liability over time.

### 5. **Address Potential Concerns**

- **Clarify Terms**: Be prepared to discuss terms, such as the down payment, interest rate, and duration of the loan. Having some preliminary figures in mind can help facilitate the conversation.

- **Reassure about Risk Management**: Address any concerns the seller might have regarding the risk of financing a buyer. You can suggest performing background checks, credit assessments, or offering a higher down payment to mitigate risk.

### 6. **Listen and Adapt**

- **Gauge His Reaction**: Pay attention to the seller's response and be open to his thoughts and concerns. This can lead to a more productive conversation and help you refine your proposal.

- **Be Flexible**: If he seems open to the idea, be willing to discuss different terms or options that might work for both of you.

### 7. **Follow Up**

- **Provide Written Details**: After your discussion, send a follow-up email summarizing the benefits of seller financing and any agreed-upon terms to keep the conversation going.

- **Stay Engaged**: Keep the lines of communication open and express your continued interest in the property, even if he needs time to think it over.

By approaching the seller with empathy, clear benefits, and a willingness to listen, you can effectively plant the idea of seller financing and potentially create a mutually beneficial arrangement. Good luck with your negotiations!

@Lance Turner

no need to 'plant the idea' - just make an actual written offer

Find him a place to move to. If you solve his problem, chances are he won't care that you solve yours at the same time.