All Forum Posts by: Christopher B.

@Nick Mand I look everywhere. I ask my salesmen at builders supply houses, friends, subs I like and use regularly, I've used thumbtack, angieslist, craigslist, call numbers off trucks, walked-up to jobsites and got business cards, references from people at reia's, business cards tacked onto walls at the bank and in sherwin williams, etc. 

It's tough to find the good ones, they don't advertise and in this environment they don't have too. My best guys are from references from another investor that was my mentor starting but then I've had other subs from references who have been AWFUL. I just got ripped by a plumber who was referred to me by a GC I'm using, I let me guard down just for a second because it was a solid reference and it bit me. I guess references are still the best but you need to be as careful with these people as you would someone off craigslist.  

Bin you should read and reread what Alfred posted, its very solid advice. I do larger projects and manage them myself. That isn't advice to do it my way either. I have good knowledge of how to put a house together with a good rolodex of subs and I often still struggle to keep my projects on schedule to be honest. It's tough, the subs will try to take advantage of any little detail they think you may not know about, they'll try and get you to do all their dirty work, and they'll do it on their schedule. 

I'm in the process of trying to removing myself from that side of the equation. The challenge with hiring a GC is 3 fold 1.) They'll want to use their subs which is fine except they don't care if their subs charge 20% more than fair market value to replumb your house 2.) There's an insane amount of work out there right now so it's tough to get in with a GC if you don't already have an established relationship, 3.) It's tough to find one that doesn't want to rake you over the coals for their service. The last GC I talked to about managing a rehab wanted 40% of my profit to do so. 

So, hiring a GC is preferable and they're worth it as long as they don't try to squeeze all the juice out of your deal. 

Contact a lot of people now, be ready to wait 2-4 weeks before anyone can start.

If you call 20 people, maybe 10 will answer or call you back. Of those 10, you will eliminate/they'll flake/can't/don't want to do your job- 5 more. You'll schedule 5 to come see the project and 2-3 will show-up. Hopefully 1 of those 2-3 doesn't try to bend you over, is reliable, and does good work.

This is my experience in the 4-5yrs I've been doing this business full-time. 

 Insurance: $100/month. Get a quote for a builders risk policy from your current insurer 

Loan payments: will depend on the size and structure. There are loan calculators you can do a search for to help you with your specific calculations.

Property taxes: get online and look at the rates of your property taxes. It's public information. Once you know the rate then you can do a quick calculation or just spend the 5mins and look up the exact property taxes for each property you purchase.

Commissions: wholesale fee will be wrapped into the purchase. You don't pay agent commission when buying. 5-6% agent commission is standard when selling. 3% if you're doing a FSBO but working with a buyers agent.

Title insurance: will be based on cost of house, etc. $300-$1000k

Utilitites: look at your own utility bill

There isn't a magic formula that tells any of us exactly what these items will cost. Some people determine the exact cost for each project by getting quotes for and looking up costs of each item. Some people, like me, just put an educated guess on items based on their experience and let things average out. Everyone has different costs. 

THere are very few people I come across that understand how to implement that strategy. I don't think it's the best strategy for a beginner to jump into. 

 Yes, without a history of verifiable income you will need a co-signor.

I charge a cleaning fee upon exit to every tenant. It's stated upfront to them. I point around the spotless unit they're standing and as we sign the lease I say "as you can see we try very hard to keep our places nice for you (here they usually make a comment about how much cleaner we are than others they looked at which only reinforces my position) and we want to to keep them that way so the next people can have as nice a place as you do today and we have good people like you wanting to live here and in our community. We expect it to be broom sweep clean but will be deducting $100 from the deposit for cleaning the apartment which honestly doesn't even cover the full cost." Never have had any push-back and this helps cover my cleaning costs while turning the unit. Unless the tenants were almost OCD clean, which I've had, we do a full "spring cleaning" of each unit upon tenant exit. 

Do you have drawings of the rest of the house? 

3/2.5 with a bonus room or 4/2.5 is a desirable house. Master on main is even more desirable but you need to make sure it's done right. I don't like the idea of losing the powder room and making guests go upstairs. The dining room is a waste of space imo so shifting everthing over and up I could see making sense.

It's tough to provide you a good answer without knowing your budget, condition of house, structural loads, flooring, etc. It can often be a subtle work of art to alter the floor plan in a way that maximizes it potential and retains the proper flow and look without busting the budget. Look at your comps, if they're selling with the same floorplan you have save the hassle.

I used peel and stick once as a short-term solution before we did a proper rehab. I don't recommend it as a "permanent" solution. Spend the extra .50 cents per sf and get the floating vinyl floor. Home Depot sells Allure, they have both interlocking like a laminate and a type that sticks to each other. I've used both and had good success.

@Kevin Keefe I didn't look at your locations o you'll have to look at the market and see if what worked for me will work as well for you. You can buy a property and get a rehab loan from a local bank. You will submit a SOW and a budget to the bank when you apply for the rehab loan. The bank will give you money, or draws, as the work is completed on the property. So you will have to use your cash to pay for the labor and materials and then as phases are completed the bank will inspect the work and cut your a check, or construction draw, for the work completed. So if your rehab is $100k you can still utilize your $60k to fund the rehab ahead of the banks construction draws. 

@John Hickey provides good advice as well. I have read gary keller's book, it is excellent and am reading think and grow rich right now. Only 3 chapters into the book and I can vouch for the quality of its content. 

Ultimately, with $60k in cash at your age you are sitting in a good position. I had $0 when I bought my first property and only $20k via a HELOC on that property after that helped get me to where I am today. As John mentioned look at your long-term goals and work backwards. Protect your cash like a mother bear and choose a path/strategy that will allow you to recycle/grow your hard earned cash and continue to move forward towards your goals. Lastly, don't let age or inexperience delay you. Use your age as an advantage.