All Forum Posts by: Mark Pierce

I'm working on my first deal, a new build in a developing portion of the city. 

The builder's contract seems to be raking me over the coals. Here are some of the issues that seem outrageous.  What's the norm and industry standard for a couple of these issues. 

- Invoices are due in 3 business days or are penalized a 1.5% late fee. 

- Builder can default and walk away for $1,000 inconvenience fee. Owner (me) owes the entire builder's fee $17k+ if I walk away from the contract.

- Build estimated to be substantially completed by 180 days. (no ending time frame or penalties for longer than that). 

-- I was thinking if not complete by 270 days then owner can hire new contractor to finish work without penalty of breach of contract. 

- Builder asks me to indemnify, hold harmless and defend the builder for any and all claims associated with design issues. (The design they provided)

Again first build. If these are industry standards then I just need to accept the risk but the contract seems to heavily favor the builder. 

Looking at some tear down homes for sale in the Nashville area. Some of these are zoned R11, which I assume falls under this description 

• R10 (low-medium density residential, requiring a minimum 10,000 square foot lot and intended for single and two-family dwellings)

What happens if the lot isn't that big but there's already a house on it. Ie. 8000 sqft lot with a SFR on it. Can that be torn down and rebuilt? Does it take a special permit?

Thanks. Mark

@Alderio Burton It took me about 20 minutes to file out the paperwork for an LLC in TN. $300 plus some credit card convenience fees. Do it online and its instantly approved. You can then fill out your EIN paperwork, which was equally as easy. I had my LLC and EIN completed in maybe an hour total.

LLC for TN:

http://sos.tn.gov/business-services/limited-liabil...

EIN: 

https://www.irs.gov/businesses/small-businesses-se...

@Cody Holbrook He's referring to the class of the neighborhood. No zoning/official designation. Basic breakdown is something A: Top notch neighborhoods, top schools, mostly home owners. B: Nice normal neighborhoods, everyone feels safe, lower crime. C: May live here in a pinch, wouldn't leave anything out that you don't want walking away. D/F: war zone, I'm not getting out of my truck. 

I'm probably partial since I just finished my residency and training. I would rent to these two in a heart beat. I don't know any resident that was ever evicted or had problems paying their rent. Remember these guys just finished 8yrs of college and med school. They know how to budget.

@Account Closed, Sure I understand that. I don't want to buy a property though that won't support a new build if that area redevelops. At the rate that Nashville is gentrifying I think its likely that North Nashville will get caught up too. 

Thanks @Mark Douglas

@Ryan Stahr I'm not a wholesaler or at least I don't intend to be. I'm looking for some buy and hold properties, but wouldn't mind if those properties are on the edge of the next market move. I found a couple of rentals in N.Nashville that are listed for sale but I haven't heard back from the sellers yet. Clearly if I can negotiate a good deal but can't make the funds happen myself I'll be looking to pass it on. 

Anyone have any thoughts on North Nashville? It seems Germantown is done. Syvlain heights/park is starting to redevelop and the home owners know it. I haven't seen a ton of development in North Nashville yet or have I just not looked in the right place.

I'm sorry. I don't have any advice. I'm not experienced enough for that. I just flat out feel sorry for you on your first flip. If this happened to me my wife would pull the plug on the whole operation. Best of luck with the recovery.