All Forum Posts by: Account Closed

@Ibrahim Yamini ya .. as I said , I don’t really understand why he did what he did .. the only thing I could come up with is that realtor got in his head ..and even though I felt a bit vindicated that it took him so long to proceed without me and I have to admit I took a little pleasure in it but not as much as you might think .. I’m just not that way as I really do wish the best for everyone .. just not at my expense lol .. the real regret is that it even happened .. I wish it hadn’t and wish we would still be partners but how could I ever trust him again ? 

Anyways .. I’m looking at partnering up on a flip I just found this week , with a investor friendly of mine .. so wish us luck ! 

And I wish you the very best ..

God Speed ! 

So , investing out of the area is difficult .. but not impossible! 
The first thing you need to do is assess your risk factor threshold.. 

that’s holds true in any investing though ..

But it may be extended a bit if you are looking at a substantial larger return  on investment by investing in out of state or out of the area ..

I would say the next thing is to find a boots on the ground person that can look after your interests and hopefully knows at the very least a little bit about real estate , construction .. ect ..

I’d prefer if they knew a lot though about what it takes to successfully invest in a property as a buy and hold or even as a flip. 

This can be a handyman , a contractor , a real estate agent / broker , , property management outfit , a family member that happens to live in the area you are wanting to invest ..

There are people out there willing to do these types of services and or even partner up on deals .. 

I myself partnered a couple times with out of state ( they lived in Chicago area  and I live in central Fl area ) investors , who where out priced in their market but at the time Central Fl was still reasonably priced for 3/2’s ..the average price we were paying for them was around $75-100k .. this was before this inflated bubble we are in now but after the old bubble had reset itself ..I’d say those same properties would be double to double and a half at least right now .. the market is just crazy .. 

it went really well on the first few flips .. the one investor only did one deal with me .. we made decent returns ( a total of around 30-35%  but that needed to be split for each of us to get our percentage ) but still .. even then it was a decent return on a 4-5 month investment of under $125k ..

Thing is , he had another opportunity that required all of his available funds so we only did that one flip ..

The other partner and I did one . We did really well on it .. bought another one that required a lot of work .. a lot !!

It was a hoarder house and I mean hoarder house .. took 5x 40 yard dumpsters to clean it out ..I had engineers stamped plans already approved by the city , had it down to the studs , had contractors lined up and ready to start when I came across another property that was a easy , easy flip at a great price and a stellar potential return ..

So I negotiated a even better deal on the 3/2 with a Arv of around $165k only required around $12.5k worth of rehab and the wholesaler was asking $85k for it ..well, I talked him down to $71k and we pay $500 towards the closing .. he accepted and my partner closed on it ..the only problem was my partner and I had set up our partnership under the terms that for each property we had a separate partnership contract and because the closing on that property was happing so quickly .. he had not signed his end of the contract between he and I .. it was discussed and printed and I had signed my end but the property closed before he sent it back to me signed .. 

I was excited as this property was going to be a easy and quick  $30-35k profit on my end ..but that excitement went away when the day following the closing came and I learned from my partner that him not signing the contract was by design .. as he decided ( after being convinced by the realtor I introduced to the deal for evaluation on the resell of the property ) that it would be a great buy and hold instead of a flip .. So my partner informed me that he was going to keep it as a buy and hold and not flip it .. and instead of me making $30-35k in a matter of a couple months .. he offered me $3k for a finders fee .. by the way, if you haven’t figured it out yet .. he was the finance partner .. I did everything else .. he put up the money so he was in control here 100% with me not having that signed partnership contract ..I was shocked and stuck .. either I accepted the $3k or I get nothing ..sure , I might have been able to take him to court but chances are I wouldn’t win and he had much deeper pockets then me .. 

So I accepted his insulting offer ( don’t get me wrong , had we discussed him just paying me a finders fee at all .. ever .. then I wouldn’t have had much of a problem with it .. ) 

After his check cleared my bank .. I withdrew the money and then informed him that our partnership was done and that he needed to buy me out of the property that I had down to the studs .. I sent him certified mail of my intentions and actions according to our partnership agreement ( as there was a section just for partnership buy outs and dissolution of partnership ) 

He argued with me , said he didn’t understand why I was upset and didn’t trust him .. then wanted to try to negotiate the amount I felt I was due for the work I already did to that hoarder house and even questioned the hrs I listed ( which was already on our daily spreadsheets previously when I recorded them ) but , in the end .. he ponied up the amount I wax due .. it was pennies on the dollar really .. it’s not like i was looking for a $15hr job ..actually, I think I ended up with closer to $25k .. but still .. that house alone I was projected to make over $50k on my end ..

Now .. as upset as I was with him .. cause I really didn’t understand why he would blow up our partnership like that .. according to him he didn’t need the money .. he wanted to start building his real estate empire instead of flipping them ..which I would have been ok with ..hell .. I would have liked to be even 25% partners on the buy and holds I helped acquire and rehabbed to rent status .. but that realtor got into his head .. when I confronted her on it , she accused me of sexually harassing her .. ( she’s a piece of work .. and she’s doesn’t like men ..as in , she’s in a relationship with a woman .. even if she didn’t look like a man ) I would never sexually harass anyone  ! 

By the way, that quick rehab for the now buy and hold .. took him and his new realtor buddy almost 5 mths to get the work done and listed for rent ..and the stud house .. well it’s just now being worked on again ..( this all happened back in 2018 .) and I have not partnered with anyone since until this last week in which I’m discussing partnering with a investor that I met here on BiggerPockets right around the same timeframe but, have since become good friends as he is local also 

I’m getting a bit off topic anyways ..my point is if you invest with anyone .. helper , contractor , partner .. especially when it’s out of the area .. be sure to have a detailed contract that spells out what is expected of each party and what happens when either does not comply with the written and signed contract .. 

and my other point is even though I felt I got burned and it took some time , I keeping my options open when it comes to partnering again. 

I hope this helps somewhat ..

I wish you the best ..

God Speed ! 

 

Hello @Russell Davis , 

I hope this message finds you healthy and well .. 

I’m glad to hear you are at the very least , getting some hands on experience..it will certainly come in hand as your investing progresses .. 

It’s always difficult to try to run a rehab while you are working 40 hrs a week somewhere else .. and even though 40 min away isn’t that bad .. it can still be hard when you’ve worked all day already ..

I’m not sure if your budget allows , but ..

You may want to consider hiring a project manager at this time , in order to move things along .. 

I know you want to gain experience doing the rehab parts .. but, there have been a lot of success investors that still don’t know much about the rehab side of things .. they just have some good people working for them ! 
You can always gain more experience as your investment career turns into a more full time thing ..
I know when most start out , it’s one of the hardest things to learn .. to give up control and delegate tasks in order to shorten your timeline between flips , thus allowing you to free up more funds to do more flips .. 

anyways , lesson over ..lol .. 

Thank you for the update and it sounds like you are progressing ... 

I wish you the very best ..

God Speed ! 
M. Short 

@Russell Davis how’s your flip going , I see by your last post that you said you are about 2 months away from finishing .. but the post was 4 months ago .. 

so are you finished ? 
how did you do that on it ? 
Are you continuing to do more flips ..I suppose in this whole virus mass panic thing going on , you might want to wait for your next flip .. 

anyways .. I was just curious and was wondering if you have pics of before and after ... 

we always love seeing before and after pics ..,

I stumbled on your post because I am looking  looking at a propoffers property in central Fl area .. 

Although , I’m looking at using it as my personal home .. and turn the one I’m in now into a duplex rental .. 

Wishing you the best .. 

God Speed ! 

I saw this on s email blast .. are you the actual contract holder or are you daisy chaining it ? 

So here’s a update .. 

that partner I was with ended up getting greedy and after I found a great deal and then negotiated it down even further .. meanwhile , he and I wrote up our contract between us which I signed but I never got his signature back before the property closed .. which I didn’t think to much about it because I trusted him .. 

but that was a mistake .. 

The day after if closed he contacted me and told me he wanted to keep it as a buy and hold and was willing to only pay me $3k as a finder fee ..,now most will say .. hey ! $3k is not bad .. and they might be right but , it’s not at all what he and I discussed or had written out in the contract that he neglected to sign but was the main author of it .. 

There was a potential of around $70-75k profit after only about 2 mths .. rehab time and market time .. the market was just starting to get hot then and mist anything was sold within a month in my area of Fl .. 

The property was located in downtown Wildwood near the court house .. 

anyway , my projected profit would have been around $30-32.5k  give or take a bit.. 

meanwhile , we had another project that I had taken it down to the studs ( it was a complete rehab obviously.. lol ) when this property cane into my snipper scope .. 

The estimated rehab cost on the property that was in Wildwood was around $12.5 and estimated time of rehab .. no longer than 4 weeks ..

So someone might understand how I could be upset when I was offered only $3k .. heck , I negotiated the wholesaler down 3 times that on price .. ended up paying $70k plus $1k towards closing costs .. 

and just so anyone who reads this  knows, 

I would not have a problem with the finders fee if it was discussed before hand at all .. but it wasn’t .. supposably, our Internet was to just flip properties ..,

So , because I did not have a signed contract with my partner , I told him sure that would be fine .. but as soon as the check cleared .. I told him he needed to by me out if the current project ( the one down  to the studs ) for the amount agreed upon per our signed contract 

( which as I said before , I did have one on that property ) 

So our partnership was over .. that was about 2 years ago .. I guess ..

The only real satisfaction I ended up getting .. and believe me when I say , I’m not a vindictive type of person .. I wish  the best for everyone but I also believe in being a man of your word .. because, really .. in this life , your word and reputation is all that anyone’s gonna remember you by .. 

so anyways .. the 4 week rehab ( and that was really allowing for maximum time , the rehab really should have taken 2 weeks... 

Instead , with out me and the fact that he didn’t really know anyone in the area except a POS realtor that convinced him to keep it as a buy and hold .. The rehab took over 5 mths .. 

I stopped by and nothing extra from what he and I discussed was done during rehab.. 

And the other property .. sat , and sat .. with nothing happening since I left ... about 3-4 mths ago .. I saw that it was demolished and then he sold the land fora pretty big loss of initial investment let alone demo costs ..

I had offered to buy the property a few months after I was bought out but he didn’t like that idea ..,instead much of the equity he made on the Wildwood property , he ended up loosing on the other ..,which , I never Intended for him to loose any money and had he not done what he had , we would have remained partners ..and even profitable .. 

who knows how many deals and how much money we could have made in the last 2 years ..

I guess the next question I ask myself .. would I ever do it again .. as in partner with someone who has all the control .. 

I guess me answer would be yes .. depending on partner and the CONTRACT .. lol .  It would have to be signed and would have to cover any property we were Intrested in .. like a blanket exclusivity.. so that I wouldn’t have to worry about getting a contract back signed before closing .. 

basically , have a true Partnership contract instead of individual JV contracts for each property ..

Oh well .. live and learn .. I definitely learned a lesson ..

@Payton Law 

I can’t believe this never posted .. I opened up this post and my response was still sitting in the post reply box .. 

sorry it’s so late .. here’s the reply and I’ll post a update after .. 

 my partner is providing all the funds for the purchase and rehab .. the only thing i have to pay for is my fuel .. so he gets all the tax benefits.. I was advised by my tax lady ..to set a a C corp and pay myself a salery .. then i will be able to write off  my miles and uniforms , health insurace .. most of my truck because i only use it for business .. my home office ..my internet , my 1/2 my cell phone  .% of meals .. ect ... plus Im just going to take profits and roll them into buy and holds ..while still doing flips with my partner 

Ok , time for me to chime in .. lol .. 

imho : I think you should run your rental as a business .. that means whatever work you get done should be by a qualified person .  If he is qualified and vetted , then there’s no harm in allowing him to complete the tasks needed but, instead of allowing him to price it out fir you .. you should have a good idea of costs associated with repairs needed and you set the price .. write a agreement with scope of work and explain that you have no problem reducing it from his rent but the only after work is completed .. you never should pay upfront for any repairs .. ever . That’s one of those golden rules .. 

if he is supplying the materials then you need receipts ..preiod ! And if you deduct the work and materials from his rent .. you still need to do the paperwork seperatly .. that way you can keep your books right .. and those repairs are deductible come tax time .. that’s one reason to 1099 him if he’s doing over $600 total fir the year working for you .. it doesn’t matter if it’s not the same unit or job .. if he works for you and you pay him over $600 total for the year .. then 1099 him ... which means tell him upfront . 

Keep this in mind .. your in business to make money .. not friends .. 

it doesn’t have to be complicated .. if you keep the paperwork separate .. also .. very important .. make sure upon completed work and final payment , you get him to sign a lien release for said work .. that way it can never come back to you that he didn’t get paid and he will not be able to put a mechanics lien on your property .. 

I hope this helped .. and I wish you the very best .. 

God Speed ... 

Michael Short .. 

@Lance S.

Looks like your not the only one who didn’t respond right away .. oops .. 

ya .. I’d love to get together with ya sometime .. I always like meeting like minded people .. never know how someone you meet today might impact your life tomorrow.. I get to Clermont from time to time as my wife works there at the cornerstone hospice as a Chaplin/ grief counseling .. I’ll be sure to ad your number and try you next time I’m heading that way .. my number is on my profile / only thing is because of sales calls , I’m forced to screen calls I don’t recognize so if you try my ..next is to text or leave a message and I’ll get right back .. 

until then , 

I wish you the very best .. 

God Speed , 

Michael Short  

I’m just repeating what some very smart investors that I know are saying .. according to statistics and graphs that they know more about than me .. there was even a article here in BP about 3-4 weeks ago .. not so much predicting or warning of a downturn but rather just putting it statistically .. we are heading for a downturn in the economy.. and from what I’ve been told .. it has the potential to make the last one look like a walk in the park .. but, again . These are just somewhat educate guesses .. 

I’ve noticed a turn in the sellers market we have been experiencing as of late .. 

and I myself feel that unless I find a no brainer .. I’m just biding my time when I might be able to find deals like I did as short as 1.5 yrs ago .. ( to flip or to hold ) 

Whatever I invest in , I’m being picky .. and not looking to buy anything that I’m. It willing to hold for at least 5 yrs or anything I can’t flip in just a few months .. no longer than 4-5 .. so .. no big rehabs .. which is about the only way to get a profitable potential deal in this market ..unless your willing to work for min wage flipping houses that is .. lol ..