All Forum Posts by: Keith Nugent

hi @Shannon Connell - welcome to BP.

Sounds like you have some great background experience so as for the site I will steal one of Brandon Turner's lines (and thereby raise the bar for his recommendation) and recommend setting up your keyword alerts. Which is how I was alerted to this post since I am always interested in networking with other Central Florida investors.

What will your investing focus be? Flip, wholesale, buy and hold?

What geographic areas do you focus on as an RE Agent? Primarily buyer's or seller's? Investor friendly agents are a bit fewer and further between.

I know you will find a tremendous amount of great information on BP and I second @Joel Owens 's suggestion abut the blog. Great to see another local investor involved here on BP.

-Keith

I think what we are all saying is to run the numbers.

Look at all options objectively, be creative and flexible, then let the numbers decide (within reason). Consider the big picture.

thanks @J Scott - I like the idea of the rough estimate, keeps it more like a working document or flexible enough for a good GC to bring up items in question.

all very good points @Josh Randall , especially for any investors less familiar with the southeast, to consider before buying here.

Hi Chris Hanratty I highly recommend going through the BP podcast and getting ideas and looking into your network to see who you may know. Show 65 is an example of starting with no money, show 42 is wholesaling and the approach can be done without cash on hand, show 14 is creative financing with Ben Leybovich (awesome show) ... And the list goes on. My basic recommendation would be to use what you do have (most likely time) - find someone successful that you can do work for (maybe not directly paid) but help them and learn - maybe it is finding a flipper that you can learn your trade from but will pay a wholesaler for a good property... Learn from them, find some properties that will make great deals and wholesale a few to them. Or find a wholesaler, make an agreement to be the boots on the ground doing the hard work and searching for the deal and splitting the profit with them relying on their marketing and network. I believe was Joshua Dorkin In show 42 that said "splitting the profit on a deal is better then no deal at all". Best of luck and leverage the great resources here at BP. -Keith

hi @Ross K.

This is something I will be working in more detail myself soon, so I am no expert but had a few thoughts if I were writing it and planned to make a signed legal document out of it.

Try to always use statements with the scope as defined as reasonably possible. For example you said "remove all existing toilets" which is great a perfectly clear doesn't leave anything that will be a question of your interpretation vs the GC's.

On the other hand "removal of damaged sheetrock" may possibly lead to (contrived) you believe it is water damaged and should be removed, GC believes it is just discolored and only needs fresh paint.

That's just an example and maybe the easiest way to attack that kind of thing without having to spend a massive amount of time and energy would be to have a clause about the "acceptable condItion" which is your discretion not the GC or maybe a short list of definitions that is standard across all your SOWs that define acceptable condition....

If you have RocketLawyer or know a great contracts guy I am sure they could help fairly quickly.

Again, no expert but that is what came to mind, I will be interested to see the other replies.

-Keith

hi @Michael Smith

I tend to agree and echo the @Robert Brubaker 's comments even though I don't think I would ever encourage a frame house for personal residence in Florida unless the homeowner went in eyes wide open.

For investment properties I think letting the numbers decide makes the most sense... But make sure to consider all the numbers.

Long term: termite bonds, insurance and hurricane ins, utility costs?(how well insulated is the house?) future market values and long term market trends.... Total cost of ownership vs total revenue.

Short term: market bias, if I was flipping a framed house I would allow extra holding costs in the budget with an expectation to be nearly the last of inventory to sell

I would be interested in metrics of frame vs block for insurance claims, mold issues, long term market trends...

Seems like if the numbers crunch nicely then why not.

-Keith

Hi Sandra Johnson - living in Brevard I certainly understand your dilemma. I want to continue the excellent point that William Brace brought up. It may be very hard to do but a really beneficial exercise may be to step back from the issue and evaluate it from a long term cash flow/value analysis standpoint. I realize setting emotion aside when it comes to personal residence may be difficult but can be important too. As for the tax advantages, I HIGHLY recommend Mark Kohler's book "what your CPA isn't telling you" for better understanding the tax benefits and some really great strategies for owning a rental. Consider the possible strategies. Assuming you hold your current house as a rental and take all the tax advantages, you just need to analyze the options. 1. Can you buy something for a payment lower then the rent you will get for your house? 2. Can you rent for less then you will bring in renting your house by giving up a little here and there? Example, if your mortgage is $1300/mo and you can get someone to pay $1100/mo then you would "break even" with what you are doing now for a payment of $1100/mo... BUT you now can factor in depreciation. Also, your expenses on the rental are tax deductions... What about tax deductions for your residence if part of it is used as a home office to manage your LLC that holds your rental property business? What if you could get into a payment of only $950 for a little while even if it is not your favorite location? Anyway, Kohler's book may help clarify how some of these legitimate strategies could help you solve the overall problem of cash flow and your personal balance sheet. Don't think of it as rent vs buy, think of it as all the possibly ways to use, manage, leverage, and conserve your resources employing your current assets and effective proven tax strategies (not scams but conservative real options for savings). -Keith

Hi Sandra Johnson and welcome to BP. I second Brandon Turner 's comment about the keywords, that is how I found this post related to Brevard (where I will be investing)... And speaking of Brevard I'm glad to see a fellow Central FL investor. Are you located in the area or just investing here? I am looking to have regular investor meet-ups if you are in town. -Keith

Hi Rick Baker welcome to BP. I highly recommend the BP podcast for lots of great information. The book on flipping houses and the book on estimating rehab costs by J Scott are invaluable. Currently a personal favorite and recommendation for anyone with rental or getting serious investing is "what your CPA isn't telling you" by Mark J Kohler. -Keith