All Forum Posts by: Larry H.

When you are turning over a unit after a tenant moves out, what does it actually cost you on average? I know we budget X percentage, but I'm curious what others are actually paying. We have 2 four plexes that are C properties. Every time someone moves out we have to fix holes in the wall. Also, I just found out, when they move out, they leave all their crap behind for us to clean out. That includes furniture, food, etc. Cleaning all their junk is a large portion of the time and cost, because their furniture has to be hauled off to the dump. Our average turnover is about $1500.

Thanks for all the opinions. Lots of different outlooks on this topic. After seeing the different opinions, I am not opposed to paying for materials up front, but I will not be paying labor up front. @Matthew Paul your comment may have saved me a lot of grief. I realized all I did was a take a recommendation from someone and talk to the guy on the phone a few times. I didn't really check him out. Turns out, he is NOT even a licensed electrician and does not even have a business. He works under friend of his who has a license and uses him to get permits, but the bid was in his personal name. It even says make checks payable to him personally. The red flag went up when he asked for 50% up front. If you can't fund a $6000 job, I question your ability to run a business. We just built a house and the GC never asked for money up front. A contractor has recourse for not getting paid for a job, the client doesn't really. A contractor can easily put a lien on the property. It may be 10 years before he gets his money, but the client will likely never get their money back.

I got an itemized quote for the first half of the job. It's basically $1500 for materials/permitting, and $1500 labor. Bank is not paying any draws until work is complete. I'm going to offer to pay $1500 up front for materials and permitting and he will get a draw from the bank for labor upon completion.

Quote is $6000.  I don't have an itemized quote.  I've been communicating via text with him.  He was referred to me by a friend who works for another house flipper.  He said that guy normally pays for materials himself.  I offered to do that, but being out of town I am kind of worried about paying for another job's materials also.

My father-in-law is our boots on the ground guy there.  He has our business credit card. I'm thinking I get him to buy the materials.  I'm just not a fan of paying anything up front.  I can kind of understand because about 90% of this city flooded and the insurance companies are writing 3rd party checks through the mortgage lenders, so contractors are having to wait a long time to get paid.  But I also don't want to get screwed.

Flipping my first house and first time dealing with sub-contractors.  The electrician that gave the best bid wants 50% up front.  I balked at that and he said he can do 25% up front.  He said he doesn't want to fund it himself and I told him that worries me if he can't fund a job this small.  He said it's not that he can't, but he doesn't want to.  I live 8 hours away from this job.  

I'm using a rehab loan with a local bank and they have a draw schedule, which I doubt includes up front payment.

What is the standard?

I used a short term (2 year) loan through a small, local bank I have been building a relationship with.  I am in the process of refinancing into a 30 year fixed now.  It's more expensive to do this way due to the extra closing costs, but I haven't found a fannie mae lender that is as easy to deal with as this local bank.  They make closing deals quickly very easy.

I bought a duplex in May and paid $0 at closing due to value being higher than the sale price.  All closing costs were rolled into the loan.  Only thing I paid out of pocket was the $600 inspection.

When rehabbing a house, do you get copies of the work permits as the investor? Do buyers typically request to see work permits to ensure the work was permitted?

I've had the desire for a while to create a nonprofit organization and purchase a single family house to provide free housing for families who have a child as a patient at the Children's Hospital. I'm doing some preliminary research and I feel like we need at least one more rental to have the extra cash flow in order to help pay for the recurring costs. My plan is to collect donations until we have enough to purchase a house with cash. My question is, if I purchase a house in the nonprofit corporation using cash, would it be legal to get a HELOC from the equity in that house to purchase a rental property in a separate LLC to help pay for the recurring costs of the charity house?

Called the city and found out what I needed to do.  Called the contractor and told him I want everything permitted.  I guess I took for granted that he was going to take care of all that.  I'm glad I looked into it.