All Forum Posts by: Michael Tompkins

How would you put a price on "free work"?  After all it is not really free.  Your work is worth a "dollar amount" to be credited towards equity.  

How would you calculate that?  

How would you avoid conflict of interest/double dipping?

I was approached by someone who has the resources (men and material as he was in roofing business) to partner up and buy MFs.  I did not take up the offer because I have zero knowledge in construction wouldn't know if he made money off our own co-owned property right under my nose. You brought up a topic I wanted answers myself.  

How would you, as a contractor, do this?  Let's see what others has to say.  

@Michael Tompkins

With contractor not putting any money into it, he/she would be 50/50 partner?  Is that the norm?

 If the contractor-partner is handling all reno and construction part of the property, only his crew get paid the usual hourly/daily rate and we split the material cost?  What would the partnership percentage split be?  Is it a 50/50 partnership with 50/50 cash outlay?  Does contractor expect his partner to put up more than 50% cash with 50/50 partnership?

I used to do this - I was the Contractor guy obviously... I did everything.....except provide the money. 

I found the property, bought it, fixed it up and sold it. Ran my crews and the subs. Also got a small weekly stipend. Pretty much like doing a Cost Plus project.

Got a 50/50 split on any profit at the end.

How would you put a price on "free work"?  After all it is not really free.  Your work is worth a "dollar amount" to be credited towards equity.  

How would you calculate that?  

How would you avoid conflict of interest/double dipping?

I was approached by someone who has the resources (men and material as he was in roofing business) to partner up and buy MFs.  I did not take up the offer because I have zero knowledge in construction wouldn't know if he made money off our own co-owned property right under my nose. You brought up a topic I wanted answers myself.  

How would you, as a contractor, do this?  Let's see what others has to say.  

How would you put a price on "free work"?  After all it is not really free.  Your work is worth a "dollar amount" to be credited towards equity.  

How would you calculate that?  

How would you avoid conflict of interest/double dipping?

I was approached by someone who has the resources (men and material as he was in roofing business) to partner up and buy MFs.  I did not take up the offer because I have zero knowledge in construction wouldn't know if he made money off our own co-owned property right under my nose. You brought up a topic I wanted answers myself.  

How would you, as a contractor, do this?  Let's see what others has to say.  

@Michael Tompkins

This is a discussion that can go on for days, and it can be complicated if we want to make is so. 

But Ill keep it simple. 

My thoughts shared with you..

Keep the house! Don't sell unless you absolutely have to. You have great equity in it, keep the momentum going. 

HELOC is an option, but whatever deal you are putting it into has to really make sense. You can always get a HELOC, don't use it, and have it ready. If a no brainer, absolutely amazing deal comes through and you need the money for down payment etc. jump on it! Otherwise be cautious taking that money out just to make some investment, overleveraging can kill you before you even start.

What is the goal here for you? Buy and hold? Flip? How involved do you want to be? 

Make sure you ae confident with what you are doing and the time that it will take away from whatever else you have going on.

Don't worry too much about cash flow in the beginning especially when you are working with limited funds. 

Do a few projects, take the cash, move on. Once you have enough cash to sparingly invest in different projects, put some in rentals, use the other to make more.

If real estate investing is your long term. Start the process, you will lose along the way, it wont make sense a lot of the time but you need to get through a lot of the hurdles, and processes to really understand what works for you and what does not.

But be careful with your home, make sure you don't lose the shirt on your back...

You can't (and don't need to) do a 1031 on your primary, so that's off the table. 

In 90% of situations, the best course of action is to take out a HELOC on your home and buy a BRRRR. You can pay off your HELOC when you refi the new property and do it all over again.