All Forum Posts by: Mike Bussing

@Yogesh M sayanakar

I’ve been a builder for 23 years and built 170 homes call me I’m glad to answer your questions. 970-209-1155

Banks are sticklers on houses being completed

There is a difference between complete and punch list items.

Gas line is not a punch list item got to have hot water

Cracked cabinets is a punch list

Shower doors is a punch list

Certificate of Occupancy is not a punch list

(I have gotten CO with out house complete)

With supply chain issues it’s been difficult to get house done in timely manner.

Walk home with builder make 2 lists

Punch items than need to wait on suppliers

Punch lists that can be completed so you can get tenants in and start making money

It’s hard to come back when people are living there!!!

He should down to cabinets and glass shower doors

Hold 3-5000$ on him so he will come back to finish.

@Roy Furbert

Also neighbor or tenant will turn you in and then what?

@Roy Furbert

The zoning app shows the didn’t disclose and misrepresented

Your lawyer will name all parties

This is why you pay big dollars to realtors for their knowledge and to protect you

@Kyle Robarts

I’ve been a builder for 20 plus years and have owned Drywall company for 30 years

GC should provide dumpster with in 90 feet of project

The GC should have in his contract for subs to do daily cleanup for safety reasons

Most houses in our area the Drywall contractor hauls his own scraps off. If it commercial or homes over 5k SF the drywall contractor puts in his contract to use GC dumpster or if job is far away.

It should be spelled out in your Build contract

@Tim Herman, thank you for the great feedback on these questions. I appreciate the detail you provided in your answer. That is helpful information to have in my back pocket as I analyze other deals and it helps me avoid bad deals as well. 

Thank you all for replying to this thread and providing valuable information. 

I realized I left out a critical factor that could have an impact on things. This is a property that is being sold by a close friend who wants to use the equity from the sale of this house for a personal home addition. We have done business deals in the past on other things so there is a level of trust that information is accurate.

@Tim Herman, thanks for pointing out those items that I am missing. If the renters are great and have taken great care of the house (have invested their own money into the property), would it be fair to assume the risk of eviction and re-leasing is low for this deal? Obviously, you can never know with 100% certainty. In terms of CAPEX, do you always include that budget? The house has a recent roof, new flooring, and relatively new kitchen/bath. Does that change the factor of your budget?

@Greg Scott and @Bjorn Ahlblad, does knowing the why behind the selling of the home alleviate any concerns for you on the 5 year lease being a red-flag? (aside from the level of ownership) I would agree if it was a random deal off the street, a 5 year lease would be a concern as it would seem the property owner made a bad deal and wants to get out. That isn't the case here. 

What range of monthly cash flow after expenses do you all typically look for? CoC ROI?

I am looking at an out of state property to buy as a rental. This would be my first out of state property and I want to know if others think this is a deal worth doing or not. 3 bed 2 bath home in Ohio.

The purchase price would be $167,000. The property is currently rented out for 5 years max (about 4 years remaining) for $1,375 a month. Assuming a 4.63% interest rate over 30 years.

Here is my budget as best as I can get: Taxes $1,734, repairs $750, Property Management $1375, Insurance $1,271 (this seems kinda high). 

I am calculating about $261 a month cash flow and a Cash on Cash ROI of 8.36%.

Thoughts? Is this a good find or can I do better? 

@Donte Handy

Buy Kwik set smart key locks then you can rekey them any time in less than a minute

@Mike Franco

$110 is cheaper than my time to fight

Pay it and get them clean you fixed the contract

Most people want to move into a place knowing the carpets were professional truck mounted cleaned

It’s in all my leases when the give me my 30 day notice I remind them about the professional truck mount and tell them I expect the receipt

@Michael Wlosek

What does it cost to give him the digital copies and rights to the plans

I get plans drawn all the time for .85 to 1$ per square ft if we use the plan off the internet we buy those in addition to not get in trouble with copyright laws. So additional 800-1200 for those so we have the permission to use and modify them

We had a non compete contract we had to enforce was told by 2 law firms it would cost about $7500 to get a injunction and about 45 days to do it.

The other side had lots of money and thought they could make it to expensive for us to continue

$28,500 in attorney fees and 9 months we won. But a real pain of time and mental energy

Sometimes even if your right and costs you a few bucks it’s better to not go to litigation to save the mental damage

Always pay for good advice glad to see your visiting your attorney