All Forum Posts by: Marcin G.

why would you sell "as-is" ? if you know about the problem then putting as-is in the contract will not protect you (check local laws). I would fully disclose what was done with the foundation (as the seller did) and would not put another REO "as-is" stigma on the property. potential buyer will start asking his realtor ..what is "as-is" ? ...the realtor start explaining "ohhh well there might be some problems with the house so what you see is what you buy ..."

the buyer " omg omg ..lets run lets run" ..

Sorry, I don't see anywhere that I said don't disclose it,

did I write that you said "don't disclose" ? the point is ..why put as-is while you already disclosed all you need ?

known defects need to be disclosed. What I said was sell with the cost of repair taken into consideration and sell "as is" and BTW, selling "as is, where is" does have liability protections in state law, it doesn't relieve you of disclosing known defects.

correctomundo

Experience overcomes your marketing concerns, have a reputable company provide a bid, show the bid, make allowances, it can be repaired prior to closing after you have a contract with an approved buyer.

I have no idea how many deals I've put together with repairs required prior to closing, hundreds I'm sure. It's common. See how many deals need repairs doing FHA deals, you'll become familiar with the process. :)

how many of those deals required cosmetic repairs vs something major as us foundation underpin ?

why would you scare potential buyers with "as-is" close ? the consumers nowadays are either scared ..or confused ...or both ...I like to keep things super easy for them ...full disclosures ..great pictures, reports etc .if you did the job right following your attorney's advice ..then what are you afraid of ? in my opinion as-is is not a great strategy on rehab. it sounds like .."I don't know if I did it right ... so buyer beware". I represented many clients on the purchase of a flip house ...never saw a flip with as-is clause...and yes .. I would advise my buyer to move on ...

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Originally posted by @Anson Young:

You are working with inferior information, unless you are hitting the source, usually MLS direct access. Even tax records wont give you the TRUE picture of a sold comps' condition unfortunately. Usually a flip comp (all fixed up) will have decent pictures of the work done, in order to sell it in the first place. Thus, an agent accessing sold comps directly should tell you 95% of the story, which is much better than what zillow, et al pulls. Let me know if you need any info in Denver, I'm a full time rehabber.

once you start checking tax records you will see who sold the house, who bough it (for flip). old MLS listing number is there ..and you can pull old pictures ..then you see the pictures after the flip (other MLS number). Probably depends on your MLS (do they keep old pictures or not). it is possible to do in IL so..yes I can see what was the condition of the property before and after ...if they took before pictures ...some REOs dont

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Originally posted by @Bill Gulley:

Sell "as is" before repairs with a credit for the repair with 5 piers or after repair. You bought it that way, will someone else?

the buyer " omg omg ..lets run lets run" ..

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Originally posted by @Jay Hinrichs:

@Marcin G. @Annette Hibbler Pre 08 paying the GC and trusting him to pay subs was common practice... as builders and GC's went down like fly's in the great depression.. many builders and GC did not pay the subs.. and this created all sorts of problems.. For example in my home state of Oregon.. properly filed sub liens are SENIOR to your bank construction loan. Title companys ended up paying millions upon millions to subs that the GC did not pay.

So what I do now is we always control the money. Unless the GC Contractor is one of my inner circle.. Even then there is only one I pay the gross amount to.

the rest I pay the sub and get the lien release from the sub for my files.. When we are done with the home we take a copy of the Lien releases to title co. and we have no problem getting early issue title or straight title policy.

I had to build about 7 houses twice when one GC robbed peter to pay Paul and the construction loans were in my name it was a nightmare on all fronts.

My moto now is CONTROL the MONEY since the bucks stops with the owner

And how i work with my GC's and I have 5 of them on different projects Is they charge a flat rate and we pay true cost to the subs.. No paying the GC who is marking up the sub.. And or you lose control of the money and project.. Thats how I do it...

On rehabs 2500 to 7500 is common fee depending on the scope of work.

new builds 7500 to 15,000 is what I pay the GC and as stated I pay the subs direct no mark up what so ever and I get all the material discounts as well the accounts are all in my name. the bill comes direct to me.. I have total control of the project. Since again the buck stops with us since we are the MONEY

Yep. I like you idea – controlling the money is the key. Taking anything for granted in IL might prove disastrous …

You have huge operation …a decent GC will not want to agree on my terms ..what I want from him is to change the rules of the game …so I will need to find middle ground.

For sure I will not get discounts on materials etc given I might do 1 or 2 flips at most in 2014 to just start the game while keeping my day job.

I am still not comfortable handing out the check to GC when he presents lien releases from the subs. What if there were 12 subs ..and only 6 got paid ?…and I see 6 lien releases …I am not onsite all the time …so it will be hard to verify that ALL the subs got paid….speaking about relationship with good GC, which will be a key to success in my first rehab …I am not even sure how I will bridge the difference between mine and his contract. I bet decent GC has an attorney who advises him at times, he paid to craft his contract…now I come and want him to change certain items such as :

last draw 25%

lien releases from subs before final payments is made

etc

we will see…

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Originally posted by @Matthew Paul:

If you hire a GC and pay them and he does not pay the subs , the subs can come back and lien the property . Get proof the subs were paid

even worse ...even if the subs are paid and he installed on my property 10K worth of various equipment HVAC, appliances etc ...the store that sold them the equipment can come after me if he did not pay the store. That's why I think I will be better off buying big ticket items (except for building materials) myself ...I think

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Lets say I have one agreement signed with GC . I pay him HIS portion and I pay subs all that is due to subs. Is that a problem ? do I need to have separate agreement with subs as well since I am paying them. By the time I get comfortable with the game I need to make sure I don’t stumble ..I cant have GC getting paid on the draws by the contract …and subs walking away hungry …is it something that can be done ?

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thanks.. I will post before and after pictures ;-)

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Originally posted by @Ryan O.:

@Marcin G.

Your right every municipality will be different, not only will the inspectors personalities differ but the process of just getting the permit will vary from town to town. Some will let you walk in with very simple CAD drawings, and maybe the license # for your plumber and 10 days later you have a permit. Others may want stamped drawings, contractor registration with fees, proof of insurance, bonds, ect.

Once I tried to get a building inspector to take a look at a project and tell me what needed to be corrected, they wouldn't step foot in the property until I had my permits in hand. Then I had to pay a reinspect fee because his initial inspection counted as a "failed" inspection. This was unincorporated Dupage county.

yes yes yes ..that's the headache I would like to avoid. I am sure they will not even want to talk to me much less visit the property. thanks a lot. any experience rehabbing closer to the lake ..maybe cook county ..maybe even Chicago ? ..how much fun is to deal with those inspectors I can only guess ...

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Originally posted by @Ryan O.:

@Marcin G.

I'm not sure what municipality you are planning on rehabbing in, but in my experience a CO is not required when you sell a property in Illinois. None of the municipalities I have worked in (Dupage County) have required a CO to sell a property.

A CO will be likely be required when you pull permits. It's basically the last step in the process. After the AHJ performs his final inspection a CO will be issued and the property can be occupied.

To your original question, I would pull permits for the work you describe. Too much can go wrong if you decide to do your rehab without the required permits.

You said you were worried about the inspector being nit picky and requiring you to bring a bunch of old work up to code if you pull a permit and invite him into your house. What do you think will happen if you get caught doing a rehab without the required permits? On top of the fines (usually double the original permit cost), and the lost time waiting to get your permits approved on a red tagged property, how picky do you think the inspector is going to be when he thinks you are a shady rehabber trying to cut corners to make a buck (I'm not saying that's who you are, but that's the impression your going to give the inspector).

I don't like pulling permits any more than the next guy, its costly, time consuming, and you risk having some power tripping inspector come into your property and tell you to bring a bunch of grandfathered items up to code. But, it is part of the business, just accept it and plan your time/budget accordingly.

yes, I plan to pull permits to whatever needs permits (dupage, c(r)ook counties) ...I am just trying to figure out how to spot "other" problems that would require extra work to bring it up to code. looks like inviting village inspector prior to taking title is one way ...having a knowledgeable home inspector who knows "local" code requirements is another way to solve for that. today I might flip in Maywood IL, tomorrow I will go Arlington Heights, IL ...and another code bible opens ..

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All Forum Posts by: Marcin G.

Marcin G. has started 18 posts and replied 93 times.

Post: what sells the house...

Post: Foundation issues, have gotten quoted 5-16 piers, what should I do?

Post: Checking Condition of Comps?

Post: Foundation issues, have gotten quoted 5-16 piers, what should I do?

Post: subs getting paid

Post: subs getting paid

Post: subs getting paid

Post: permits

Post: permits

Post: permits