All Forum Posts by: Moshik Zemach

Hi guys.   Any recommendation please for a land use attorney firm in Austin (or generally in texas)? 

Someone to advise and support the entire process of subdivision and land development?

Thank you!!

@Venu Vedre

The house you are lending on is the collateral you will use to pay off the loan in case the borrower (in your case, the GC ) does not pay.

Regardless of which option you chose you must have a legal document (a note) that gives you the legal means to take 100% possession of the house in case of non payment. Make sure to record it, as already indicated here.

Get a lawyer to put the proper language and to draft it. Do not do it yourself and do not use standard internet forms.

At the very minimum the lawyer will need to know the loan amount, length of time of the loan (the “term”) and the interest payments (amount and frequency).

@Sam Horton

@Samara Huntley

@Igor Stankevich

One of the most important clauses in a contract with a GC should be the agreed milestones and corresponding payment amounts. We call it “schedule of values”. This is normally agreed upon when the contract is signed, and that way you avoid these type of discussions mid-project. If you feel (like me) that maybe it was not laid out properly in the original contract, I would schedule that walk-through with him as suggested earlier and restructure the contract to add it. I don’t think he will object to it because I’m sure he is not enjoying these discussions either. Better now than drag it longer.

You have to be at a point where you guys agree on milestone payments from now until the end of the job. Leave no place for interpretations.

One thing I would add:

When a GC is running other subs you must double and triple verify that he is paying them. It is not uncommon for a GC to get your payments, not pay his subs and later disappear. The subs will come after you and put a lien on the property and then it is your problem.

How to verify? Call the subs and ask, ask to see receipt of payments before paying him, have him sign a lien waiver and/or a sworn (notarized) statement that he paid his subs, etc.

@Igor Stankevich

The short answer is that a stage is not completed until fully inspected and approved by the city/county. So he should not be entitled for a full “mechanical rough complete” stage.

If I understand correctly from what you are writing, you already paid in full for stages 1 and 2 while admitting that those stages were not satisfactorily completed, per your contract. Am I right?

Also, curious… if money is indeed “spread evenly” between 8 stages, how come paying stage 3 in full will get you to 50%..?

But anyway, putting that aside, no, you should not “finance your GC” BUT also understand that most of them (especially the small) pay their employees’s salaries from the project’s proceeds and all of them are very bad at book-keeping and cash flow projections. So you kinda need to strike a balance between always making sure that he is not front-loading you but also making sure you are ‘feeding’ him enough to be able to continue. More of an art and human-relations than science.

If you feel that disagreement is getting worse and you are facing a possible showdown between you and your contractor, I would suggest you (1) schedule a meeting with him FACE TO FACE and ON SITE and make a written, agreed list of items completed and list of items still open, (2) ask him to bring backup support for his “expenses” claims and (3) be open - or even suggest- to restructure the contract (if needed) so that it works for BOTH of you going forward in terms of milestone payments. Be very clear and spell out what triggers a “completed stage” and a payment (e.g successful inspection, an operable HVAC, etc)

Good luck. Feel free to reach out for any questions

@Joshua Frank

Kudos for making a decision and taking steps to source knowledge about it. That determination will get you to where you want.

I have been dealing with pre-foreclosure in for a long time and had some success.

Enter into this realm with the understanding that it is a very heavily targeted group.

Being a public record, EVERYONE has access to it. You can imagine how many calls, texts and mail people in pre-foreclose receive. Many of them are in great emotional distress and usually closed off to accepting any help.

Your first challenge would be to differentiate yourself so that you can get them to answer you out of everyone else. Not impossible, but also not easy.

My recommendation is to come from a genuine place of wanting to help them by laying out ALL the options available to them with THEIR interest in mind. Learn very well the foreclosure rules in North Carolina (I’m also in Charlotte).

Many of them just want to find a way to keep their home.

Only if no other workout solution is available to them, you can explain how a sale or SubTo can work for them.

Two of the most important numbers you need to get from them are (1) the total payoff amount demanded by the lender and (2) if they receive a reinstatement plan from the lender, what that plan is.

Feel free to reach out. Happy to do the first few with you together and help in any way.

@Kellyn Cameron

Sounds like you already reached out to him, but what I like to do is come to people I am interested in investing with and tell them that ‘I have some funds set aside for investment’ and ask if ‘they know anyone who is looking for a private money lender’.

More often than not they will end up telling me that they are interested. I find this approach to put one in more of a position of power than “hey can I invest with you?”.

Kellyn, if you ever decide to be an active investor in Charlotte then we can chat a little more and see how I can be more of a help. I’m both lending AND sourcing my own deals and flipping in Charlotte NC and found this market to be rewarding.

Look around for the type of properties you want to buy, get a feeling for the price point and ask for that. Better ask for more and let them come back to you with the actual amount approved. In other words, don’t overthink the amount. They just need to know your ballpark range. They will let you know at the end of the pre-approval process what amount they pre-approved you for.

Once you do one or two deals you can go back and ask for more if you establish the track record.

@Ricky Jefferson. Have you reached out to Charlotte Metro CU?

Deane True

Commercial Services Manager

Charlotte Metro Federal Credit Union

P:

704.375.0183 x4331

F:

704.348.2918

Facebook:

CharlotteMetro

Website:

https://cmcu.org

“Like a Bank. Only Better.”

@Anks Desai, unfortunately this is exactly the process to resolve this. You must start eviction proceedings and the sooner the better.

If you need recommendations on eviction lawyers in Charlotte DM me.