All Forum Posts by: Richie Thomas

Thanks @Jermaine Chad Ingram.  Seems like there are a few 3BR/1BA in the neighborhood, but I agree 2BA would be better.  If I padded the rehab budget a bit I might be able to add one.  I'll run the comps on 3BR/2BA properties and see how it looks.

RE: 3 roommates @ $675 each- I hadn't considered that until now.  $675 does seem to be a conservative estimate for a private room in that area, based on the listings here.

I also just realized- I forgot to include a budget for furnishing the property.  Whoops.  That'll add at least an extra $6-8k, assuming I go the Ikea route.

The property is a 3 BR/1 BA in Benton Park neighborhood of Bakersfield, CA.

I approached this as a BRRRR deal, and wrote a blog post about my sources for these numbers (including the expected monthly rental income, which I realize is extremely optimistic to many seasoned investors, when compared to Rentometer numbers).

Even at this optimistic income level, I concluded that this deal was unlikely to succeed.  Nevertheless, I'd love any and all feedback on my methodology.  I care much more about your feedback on my thought process than on the prospects of this deal in particular, which was more of an academic exercise than a serious consideration.

Thank you!

@Brian C. which brokerage did your wife go with?  I'm looking to do something quite similar.

@Blake Hudelson or @Mike Douglas- did either of you ever find a brokerage that you're happy with?  I am in the same boat and your opinions / experience would be valuable.

@Elizabeth Blazina did you end up finding a brokerage that you're happy with? I'm looking to do something similar. While I don't plan on representing other buyers or sellers, I do plan on making a significant number of offers and representing myself as a buyer. I earned my license in order to access MLS and to have the ability to make offers on HUD properties without pestering some poor agent with my frequent requests for help.

I just got my California license and am considering hanging it with a virtual brokerage.  Does eXp have performance criteria (i.e. certain minimum number of transactions per month or year)?

@Alece Ronzino I have not, but to be honest I haven’t been looking very much. Happy to post something here if that changes. 👍

Thanks for your perspectives @Caleb Heimsoth and @Jeffrey Stasz.  I re-read my original post and realized it could be interpreted as perhaps casting aspersions toward contractors as a group.  To clarify- that's not my intention.  I understand there are many ethical contractors out there, and I'd bet most of the ones that post on BiggerPockets fit that description.  If they spend time here trying to cultivate a positive reputation, by giving advice, answering questions, and otherwise being of service, I'm confident they're a safe bet.  The reason I'm focused on the unethical ones is not because I think most builders are unethical, but simply because if I'm lucky enough to find an honest one, the question in my post will be moot.

I'll defer to your experience when you say that ethical contractors make their money by efficiently executing a plan, but unethical ones (like unethical folks in any industry) will make money any way they can.  That's what makes them unethical.  Surely we can agree that there are good and bad actors in every field, and so one of my primary tasks as a newbie investor is learning how to tell those two groups apart, as far in advance as possible.  I trust that this statement isn't a terribly controversial one.

Two of the biggest contractor-related risks mentioned in the BP book I'm reading are contractors who either pad their materials expenses or keep excess inventory that they have billed the client for, to use on a future job.  That was the goal of my post- to find a way to mitigate or eliminate those risks, not to cast aspersions on contractors or builders as a whole.  If the way to avoid those risks is to avoid working with someone like that in the first place, then it sounds like the real question I should be asking is how to sort the good from the bad.  Which would be a question for a different post, but one that seems worth asking.

@Caleb Heimsoth I was under the impression that clients purchasing materials was common practice, given the frequency with which I've seen the advice mentioned (not only in David Greene's book but on the BP podcast and elsewhere).  I'm curious what objection the contractor would have to their client buying the materials, especially if the contractor could simply give the client a shopping list of exactly what was required?

It seems like the client has a reasonable fear of being over-charged on the materials end, since shady contractors could simply pad the materials bill.  So I'm curious why an ethical contractor would have an objection to this practice, given they know how their unethical counterparts operate.

I'm reading @David Greene's book "Long-Distance Real Estate Investing", and am learning a ton from every page.  One strategy that he mentions for avoiding getting ripped off by contractors is to shop for and purchase the materials yourself.  This makes a lot of sense, but this seems hard to do when one is investing remotely and I don't see any remote-specific advice in this section.  In fact, a lot of the advice seems to apply more to local investing (for instance, he recommends buying clearance inventory, but I know that what counts as excess/clearance inventory in one store location won't apply in another location in another state).

Does anyone have experience buying and paying for materials remotely?  Is my best bet going to my local big-box home improvement store and placing the order there, but having it fulfilled at the store's location near where the property is?  Is this what most remote investors do, or is there another strategy I haven't considered?  Thanks!