All Forum Posts by: Charles May

Hey Christopher! Sorry for the delay on the update. As it stands now, there is no deal currently in the works. The client had to walk away after they sat down and worked through their finances. They did tell me that if/when they are able to buy that they would like to have us do a project for them, so we'll see.

Thanks for asking though!

@Michael CampbellI'd be cautious of the numbers you posted. If you purchased a SFH here in NEO for $50K put $20K into it I highly doubt you have a house that would sell for $145/$150K. I think it's more on the line of $50K purchase and around $40-$50K in rehab costs would get you to those numbers.

I get you may not want to put that much into a rehab for a rental, so that's the decision you have to make. I just think your numbers are a little skewed. I would say I think Cleveland has a strong rental market and you can get decent rents in pretty much any area. When we evaluate a property to rent we try to get a $1 per square foot once we are ready to rent it. That has served us well, so far....

I've been working on some mock deals and tweaking them to best and worse case scenarios. I guess my concern at this point is whether or not they plan on contributing financially at all until the rehab is complete and it is time to buy. From what my friend has said through conversations with her sister they want me to handle every aspect of this until it is time to buy. That being said, they would have purchased my last flip but it didn't suit their needs size wise, so I believe we have similar tastes from a design standpoint.

@J ScottI do like the idea of multiple finish selections with alternates and pricing for each finish. At the end of the day I think this could work when ALL the details have been agreed upon and signed for. Stay tuned!

First of all, thanks for all the responses and bear with me as I try to respond to it all.

 @J Scott This would not be our first flip, and I agree I wouldn't recommend doing this for a first one either. I'm just putting out feelers as to some basic terms, down payments, etc. I have yet to even speak to these people. I've been talking with the client's sister (she is a friend of mine) who relayed to me that they wanted to do this after seeing our last flip.

@Bob Collett- I like what you laid out in your comments....I'm just wondering if this client even knows what market value means. Their market value and the actual market value I'm quite certain are not the same thing. I like the back-out clause (10% of the expected price, or something to that effect)

@Sean Cole- I thought the premise of that show was that Chip/Jo were basically a one stop shop for their clients, from purchase to sell and everything in between. This is what my clients want from me.

@Jeff B.- That is one of the things I am concerned about, as to what these people would want in their "dream home" and then it falls through and I have a "nightmare home" that I have to rehab AGAIN to put it on the market. From what my friend tells me, they are looking for a 4BD/2BA, Colonial with a 2CG in the Parma, Seven Hills area. They are currently living in Shaker and want to be back on the west side. I told her that that house would be hard to come by in that area at a reasonable price and/or would need to be priced significantly low to be worth rehabbing it.

I know I'm kind of shooting from the hip here not knowing budget, timeframe, their ability to actually buy, yada yada. I'm just not someone who likes to sit down to negotiate with no background knowledge of what it is we will be doing. Again, thank you for taking the time and responding and I will post the details one way or another as to how it goes.

dcvd

@Steven GesisThanks, and yes we did well on the flip! That's what I'm trying to build (my safety net) I also don't want to meet with them without any information. I came to the same conclusion as well about making them purchase the house with their own money. It's just that I don't want to be a G.C. for their rehab project when I can just do my own and put more money in my pocket. Either way I will sit down and hear them out, I guess considering there is a t.v. show about this stuff there must be a market for it......right?!?!

If you're not bringing money (or very little as you say), what other services and/or experience do you bring to the table? What would make someone or a financial institution want to do business with you? Everybody has to start somewhere I get it, but as @Joe Splitrocksaid "If you have no money, you need to hustle and spend time learning. Nobody can do this for you."

To all:

I recently finished a flip, after it was done I had a friend who saw what we did told her sister (who apparently is in the market for a new house this summer) and now the sister wants me to do the same for her. Basically a Cleveland version of HGTV's Fixer Upper. She wants me to find the house, purchase said house, rehab it (to their specific wants/needs), then sell it back to them at market value.

Now, bear with me as I have yet to sit down with these people and know next to nothing of their budget, area, etc....they just wanted to know if would be interested. I am here to find out if anyone on BP has done this type of work for a client, and if so, what are/were the guidelines you used in the deal. I am intrigued at the possibility of doing something like this but it also scares the hell out of me. My concern is we do all this work, the deal falls through for a myriad of reasons and I am stuck trying to sell "their house". So....again if anyone has any useful input as to even what kind of questions should be asked when we sit down I am all eyes. Thanks for your time.

FWIW, I bet if you look you can find good cabinets right here in the U.S.....

@Heather Jones

I am a plumbing contractor, based on what's in your post pay him for what he has completed (based on your 70% completion) and cut him loose....it's your project and if you aren't happy with him it's up to you to tell him. It sounds like he under bid this job if he's telling you he's out of pocket at this point....which is NOT your fault! 

That being said once you hire another plumber he may say that the last guy did not install/rough-in the fixtures correctly/up to code....In which case he may need to alter or remove what was already installed (so be prepared for that), call for an inspection (you did get a permit, right?) the inspector will tell you if what the contractor installed is correct....we've been called in to do this thing (finish another plumbers mess) quite bit.

A month and a half on a $6K job and he isn't done is a red flag. Next time ask how long the project will take, any contractor worth a damn knows those costs, as that's how he's coming up with the price for the job! How have YOU cost him anything...unless you were purchasing material and not having it on site when he came to work...other than that, I'm at a loss...

If you have any other questions feel free to ask.

Regards,

Charles May