All Forum Posts by: Christopher K.

Yep

@Kris Nicholson Welcome aboard. I'll jump on the band wagon and also emphasize the importance of networking. TREIA and this site is a great place to start.

I'm going to be very transparent with you. Generally speaking - investors, builders, developers, and the like in this local area have grown increasingly protective about their preferred contractors. There is so much construction going on right now that contractors/subs/trades/even GCs are in such high demand (especially good/non-crook types) that most of us are not willing to share.

I can't speak for everyone else but my own reasons have nothing to do with 'hoarding' or trying to be stingy or unhelpful by any means. It's bred out of necessity. It's really difficult to get the good guys out to your own job sites, especially on any sort of regularity. They just have SO much work. I've also found that contractors, on the whole/by and large, tend to have S.O.S. (shiny object syndrome) and are prone to chasing nearly any opportunity that comes their way, without regard for how it may affect their current work load and already committed responsibilities.

In the recent past, when I've given one of my guy's contact info to someone else or lent them to a colleague or friend, even with the understanding from all parties that it was only for that one specific job - there were too many times where this appeared to have directly led to delays in my own projects and/or the other colleague or supposed friend poached them and began sending them more and more work. Which only made the timelines on my jobs grow more and compounded the issue.

I'm fortunate enough that I have enough work for many subs that my jobs comprise a significant portion of their total work schedule for the week/month/year. Some of the bigger companies, might be in the neighborhood of 5%-10%. Smaller guys, I'd wager it's in the 25% - 75% range. I also pay really, really quickly and don't beat them up over price. Every single time. Many of these guys, especially the smaller subs, come onto my team with the express understanding that if they would like get my business and keep my business - that they are not to take on additional work for other investors/developers (people who are most likely to throw any kind of volume their way and subsequently compromise my ability to get my jobs done in a timely manner) without my approval. If I find out that they are, they are off the team.

It hasn't always been this way, it won't always be this way, and I really do wish that things were not as cut throat and competitive as they are right now - but that's just the reality of the market down here currently. For those of us that do this full time, this is how we support ourselves and provide for our families. So this isn't a game for several of us and the stakes are quite high. I run my business as such.

It might sound harsh and I don't think most people usually speak this candidly about it. It's more one of those unspoken rules. At least for me and many colleagues in the business that I know.

I mainly felt compelled to share this since I saw that you were posting from out of state and may not be privy to the lay of the land or nuances of this specific market area.

As @Karen Margrave mentioned, I'd probably suggest Angies List or perhaps Homeadvisor.

Another resource you might could try is perhaps contacting some property management companies here locally and seeing if they have any contractors they might be willing to share, perhaps because you were nice enough to the person answering the phone .. or perhaps in exchange for future consideration of management fees on investment properties you are purchasing in their area.

I wish I could help you more directly.

Best of luck.

As others have mentioned, still lots of unknown variables. If that was vinyl siding, carpet/vinyl flooring, laminate countertops, cheap cabs from the big box stores, etc. - then $29k could be a little heavy. 

But if the work was done correctly, by licensed/insured guys, and or you had a GC or anyone who even remotely knew what they were doing managing the job, I would say you still probably didn't get ripped off or massively overpay or anything.

Costs on a full gut with windows, trades, fixtures, siding and the like add up really fast. Also anyone doing this on a regular basis right now knows that getting construction done (and done right) in this market is very challenging and   is more expensive. Lumber and other material costs have gone up and up (lets not even talk about plywood right now) and labor costs have continued to trend up, as we all know what high demand does to the cost of anything.

Again, assuming the work wasn't shoddy and you bothered to have it inspected and have already passed your final, I wouldn't worry too much about that cost for that amount of work. $30k goes REALLY quickly these days.

I concur with @Dave Toelkes. You'd need to line itemize the closing costs and tell us how much you're buying the property for to get a real opinion of where you might be getting hosed, if anywhere.

For an example, on a recent $200k cash purchase closing I had here in Raleigh, I paid $550 to the attorney for his fee to conduct the title search and close the loan (this is higher than I typically pay but I closed at an atty's office that I don't usually close at due to other semantics surrounding the deal itself and the seller). 

The title insurance premium was $361.57 and I paid $26 in recording fees. For a grand total of $937.57 in closing costs.

If you're closing on a property this time of year, before tax bills have come out - you shouldn't be charged or paying for anything for the taxes at the closing. Rather, you should be receiving a credit from the seller for his pro-rated portion of the taxes (for Jan 1st, 2018 through the date you close), as you will be expected to pay the entire year's tax bill once it comes out in September).

The only exception I can think of to this is if the seller is behind in taxes for previous years, in which case this should still be a seller's side debit/charge and not one for your side, as the buyer. Unless the seller doesn't have the money to pay it and you've agreed to pay them .. and the attorney already knows this and is reflecting this in his 'quote'. But I doubt this is the case from the sounds of it.

I have purchased properties before where there were incredibly complex title searches, where multiple estates were involved, heirs died without a will, hand written deeds in the chain with incorrect or incomplete legal descriptions, etc. - and in instances like these, I've paid the closing attorney upwards of $1k - $2k just for his fee alone. But since he had to put in several hours of additional time and effort over and above the norm over the course of many weeks to get the title to a place where it could be considered marketable, I did not consider this to be unreasonable.

Without some extenuating outside circumstances like this, I find it difficult to think of a scenario where you should be paying $3,500 in closing costs or over $1,750 in attorney fees, even if this included the title insurance premium on a more expensive property and a couple of 'junk' fees (IE - copy fees, toner charges, courier or carrier pigeon fees, etc).

But again, if you'd like a more in depth analysis, you'd need to give us a line item breakdown of each fee.

If you'd like a recommendation for another closing attorney in the area that should charge you considerably less, feel free to PM or email me.

@Stephen Turner I would recommend Justin Taylor at Roper & Taylor or Kathie Russell at RDU Law as far as wholesale friendly closing attorneys go.

I work with wholesalers regularly and I've been seeing just as many using the standard 2T Offer to Purchase these days as I do seeing the previously industry standard 1 or 2 page boilerplate type deal.

I'd ask either of these closing attorney's if they have forms they're willing to share or draft for you. If you've never worked with them before, you're liable to have more luck if you offer to actually pay them for their time/services. I doubt either would charge you very much but if I were them, I'd want something .. as a lot of people talk about wholesaling and very few actually do it. Real attorneys know this. So until you've proved yourself, I wouldn't expect any professional to give you a lot of free or courtesy services.

I'm a RE Broker so it's not worth the liability for me to send you any contracts I use or have used, something hits the fan in the future, and then it somehow gets traced back to me. I'm not a lawyer. I'm pretty sure you can find some of those 'boilerplate' type 1 or 2 page purchase contracts, as well as simple assignment contracts in the downloads section of this site.

Whether or not they would hold up in an NC court, if it ever came to that, I couldn't tell you. But at the end of the day, this is pretty much the entirety of what a 'good' contract boils down to - besides the obvious spelling out of the terms that two parties are agreeing to. A contract and its enforceability only matter when something goes south and at least one party decides it's worth the financial and time investment to pursue legal action.

This is pretty rare in my experience, but when it does happen, you are really going to wish you'd spent a couple hundred bucks (at most, I'd imagine) to have a RE attorney draft and/or send you the contracts you use. This way, they theoretically assume at least some of the liability for it's viability in court. Or at the very least, it will look a heck of a lot better for you in court that you can prove that you actually put in the effort to do things correctly.

An ounce of prevention is worth a pound of cure..

@Chris Martin Have you tried New Republic Savings Bank or Roxboro Savings Bank? I have found these smaller, regional banks can be more open to development and investment backing than the bigger names.

If you're looking for individual contact names/#'s, PM me and I can send you some.

@Derrick Reid Kathie Russell @ Russell & Associates or Justin Taylor @ Roper & Taylor

I concur with everyone else that's posted so far in this thread.

There aren't very many 'bad' areas these days in and around the immediate Raleigh area and those that are should be pretty darn obvious by either/both: a) a quick market/comp/DOM analysis of the immediate neighborhood/block/street ; b) driving out to the property in question .. I find that if you have any sort of reservations about the property and immediate area, that you do drive-by's at different times of the day/night on varying days of the week and weekend.

This would be the least I would consider in terms of initial due diligence on your part if you're not already very familiar with the location or neighborhood in question. The double edged sword or rub with this is that if it's really a deal, it will almost certainly be long gone by the time you do the proper amount of diligence (assuming you're not already familiar with the location and can't make an immediate move on it).

So if you're not familiar with the area, find someone you can trust to run potential deals by (@Dawn Brenengen is a good example) or try and partner up with someone who's got more experience in the area you're trying to work. Just make sure you can bring something to the table or else JV'ing isn't going to make sense to anyone that truly knows what they're doing.

I'm approached regularly about partnering or JVing but all too often the person asking isn't bringing anything of real value to the table. Or else they have vastly over-estimated the value of whatever they are bringing to the table (a potential deal, money, construction expertise, offers in the way of 'sweat equity') in my opinion. In other words, if I can already accomplish whatever you're offering to do or provide for $_X_ amount of dollars (normally in the form of a line item expense within the deal) and you are offering the same thing but want some substantial cut of the profit, that is an equation that won't ever make sense for me, naturally.

This is only my opinion but the harsh reality is that competition is fierce and the market around here is both very saturated and currently remains a hyper-sellers market. My experience is that the local guys that have been operating in these 'A markets' for several years and do this full time have a TREMENDOUS home turf advantage and scoop up a large majority of the real deals. That's not to say that it's impossible to find a deal by any means. Especially if you're willing to do one or two deals every once in a while as they come up. But unless you find a competitive advantage and/or you have a lot of time to invest into acquisitions, you'll be searching for needles in haystacks.

All of that said, I've found that my criteria for what I consider to be a real deal is much stricter than many others. I don't invest notable chunks of my time, money, risk, or energy into projects that are going to net me $5k, $10k, $20k or typically anywhere even remotely close to that. Whereas I see other people, especially newer investors, that are so anxious to find a deal that they are willing to cut their margins razor thin like this. However, this is a recipe for either not making much money (BEST case) .. or more realistically, breaking even or losing money after everything is all said and done. There's just too many variables involved and when you have to move at a cobra's pace whenever an opportunity presents itself to even stand a chance of picking it up, there's only so much diligence you can do. So there's going to inherently be a greater degree of risk. So again if you're not versed in the market, neighborhood, area, etc. - it's probably much better that you don't take that risk. Take whatever amount of time it takes to do the proper amount of diligence you need to make a prudent decision. Just do it with the understanding that you're going to miss a lot of deals until you learn more and get more confidence and competence. It's just part of operating in a new (to you) area. Unless you just really like gambling or have money to burn, in which case, by all means - roll the dice if that's your thing.

Further - contractors and suppliers are SO damn busy these days with all of the construction going on around here that getting a renovation of any real scale completed correctly or a new construction job done is a very serious challenge in and of itself and takes a great degree of skill, care, TIME, connections, and probably some luck. I say all of that to say that budget overruns and time/schedule delays are almost inevitable. These alone can add up or stack up quickly to evaporate those thin margins I was speaking of a few moments ago.

Probably the biggest mistake I see newer investors (and even not so newer investors) make over and over again in this market is trying to jam a square shaped object into a circular hole. Instead of waiting patiently for a real deal to come along or altering their current or past approach so that they can ideally better locate a real deal, they start putting on their rose tinted glasses with ARVs, neighborhoods, and repair costs and compromising their math or analysis formulas because, darn it, doing any deal has to be better than not doing a deal at all, RIGHT?? Not in my opinion. The temptation for this is quite high and if you're not real careful and objective, almost anyone can boil themselves in water slowly over time with these sorts of poor judgement errors.

Do your research and attend networking events and talk to and MEET PEOPLE in the area.

Regardless of the state of the investing market, this really is a great place to live. For many reasons. Just ask Forbes magazine ;D

Best of luck!

@Chris Martin I have not but I've been interested in this for a little while. Please keep us posted with how things unfold.