All Forum Posts by: John Cashin

Originally posted by "DannyK":

Start small, and work your way up. Ask questions.

Danny, what exactly is starting small? Sub-dividing a residential property? Or New construction on a empty plot of land? I'm looking to get into developing in a few years after i flip enough houses to get some money to support the endeavor.

Is it a good idea to start a construction company or do you contract one?

I got 2 estimates (in NY) for a 1000 sq ft. 2nd floor. 1 place I checked did modular extensions which are basically pre-built, fully finished units thats they just plop on top of your existing framework. That went for $100-$150/sqft which did seem like a bit much, but you have to remember how much work isn't being done at the residence.

The other estimate I got was from a contractor who would do all the work excluding furnishings for $60,000 - estimated as a project, not sqft (but it comes out as $60/sqft). With contractor estimates I like to increase the price they give me by 10% or so for a better estimate of what it will cost me at the end of the project.

I ended up deciding it wasn't worth the time & money to do it, i wanted to get the cash out of the property right away.

I got 2 estimates (in NY) for a 1000 sq ft. 2nd floor. 1 place I checked did modular extensions which are basically pre-built, fully finished units thats they just plop on top of your existing framework. That went for $100-$150/sqft which did seem like a bit much, but you have to remember how much work isn't being done at the residence.

The other estimate I got was from a contractor who would do all the work excluding furnishings for $60,000 - estimated as a project, not sqft (but it comes out as $60/sqft). With contractor estimates I like to increase the price they give me by 10% or so for a better estimate of what it will cost me at the end of the project.

I ended up deciding it wasn't worth the time & money to do it, i wanted to get the cash out of the property right away.

Here's the wallpaper of my flip's bathroom:

hilarious.

Half way through my first flip, i've realized:
-not everyone is into real estate
-a lot of people are too lazy to do the work required for the first one
-(obvious) there some serious risk if you don't know what you're doing, and older people i know are especially hesitant because they have a lot more to lose
-the market is "slowing down" (personally, i don't think its slowing down, i think its changing)
-people think too many people are doing it already
-some people just don't think its worth it

as for the TV shows making it seem glamorous... well i've been watching 'flip this house' series this season and not many people are doing very good with their flips on the show. most of the people end up being greedy and over pricing their house because they think its worth more, or they lack the work ethic to finish the flip in a timely manner, and no one on that show can make a realistic budget apparently. i imagine this actually discourages people at this point - but it makes for good television none the less.

you get more over time... i have 100 and they are pointless if you ask me because i don't even know 10 people who i could invite.

there used to be a gmail spooler online that you could donate your invites to and it would allow anyone to sign up in the rare case you didn't already know anyone with it, but google made them close up shop.

Personally, i don't know how picky they are. Its possible that a "detailed" project analysis made from ball park figures would be enough in a business plan, but i guess that depends on how well you can write out your business plan and what they think matters.

What i do know is there are other ways to get mortgages through conventional means. You could partner up with someone who has assets but bad credit (trust me, they're out there :wink:)... if you're tight on funds it may be a good idea to partner with someone for a house or two. you don't have to continue working with them, or if you decide things are going well, you can. there are options out there so take your time and think hard about it.

Often you can get a ballpark number from a contractor giving him basic details of what you want done including things like how much square footage you are talking about, quality of materials, and any other important details for a particular project. since you're estimating costs, ball park numbers are usually fine and this is what i would suggest doing to estimate repairs.

if you're trying to do a detailed project analysis, you'll probably want the contractors to come see the property but you probably won't make any friends if you don't infact own the property yet because theres a good chance you are wasting their time considering how easy it is to lose a property to someone else before its in contract. i leave this as a later step since such details are unnecessary until you're ready to do the work.

as you do more and more properties i'm sure you'll be able to estimate repairs without this step.

I think the best way to figure out prices is just to contact contractors in the area for quotes on different projects - like getting the roof redone or the driveway done. then when you are ready to have them do the work you already know who charges what.

Or if you just need to estimate materials because you are going to do the work yourself just make it a habit to look through circulars in the paper and stroll through your local hardware store (lowes, home depot, etc.) every once in a while. from there, multiplying materials X square footage you can get an estimate on any material costs on the property.

Me and a partner have a property that is 2 bedroom, 2 bathroom, and about 1250 sq ft (not including garage). It also has a full basement that is about 1000 sq ft. The basement is unfinished and in good condition. We have been debating whether or not we should finish the basement - wondering if it will add value to the property.

Some background on the property: many houses in this area have 3br/2ba and 2nd stories. Our property is single story with an ideal location (end of a cul-de-sac with a nice lot size in a nice neighborhood).

i would do the work with my father (free labor :mrgreen:) over a weekend or 2 and we have some experience in finishing basements. We've done 2 full basements to date and they've come out nicely. whats the consensus on this?