All Forum Posts by: Christopher B.

Be organized on the front end. Have your plan and stick to it. Changes, indecision, and unpreparedness cost you time and money plus make your contractors frustrated. Do them a favor and be organized and decisive so they can get things done as efficiently as possible. Happy contractor, happy investor. 

Only pay for completed work. No upfront deposits to contractors. It's OK to pay for materials for certain subs, it is not their job to fund your project but no labor payments.

Make sure you are covered with proper insurance. A lot of liability in this business. 

Find a balance between design and budget. If you're not good at design it's OK. Don't try to be original, Google is your friend. Find something you like and simulate the same style with your selections as close as you can. Copy the paint colors, etc. Don't make things harder than they need to be. 

You don't have to be an expert on construction but if you plan to project manage and over see the GC and/or subs then you need to learn the basics or you are going to get kicked around in this business. The stupid tax can be pretty hefty. 

Find your strength and hire/partner for the weakness. Half the watermelon is better than the whole grape. 

LVP is your friend. 

Don't chase deals on materials constantly. You are wasting time. Look to make it easy for to get materials organized and to the site. The service a supply house provides is most often worth the extra price you may pay because it saves you countless hours. If you are going to use a box store stick to Home Depot, sign-up for a pro account and take advantage of their backend office for Pro's, it is very robust and will make your life easier. 

Use text to confirm for order purchases or give your PM a HD/CC with a set limit.

Many moons ago I was OCD about site cleanliness. I would literally vacuum my site multiple times per week for example. I have learned to relax a bit. Lately maybe too much but I haven't had time or desire to be on site much. Optimally the site is swept daily and debris placed in trash. I like to see my materials organized and overages returned sooner rather than later when we feel we are done. I will be hiring a PM here in the next 60 days and site cleanliness will be an important point of emphasis. It is a reflection of the contractor. A clean jobsite is a safer and more productive jobsite. It also encourages subs to be cleaner and helps reduce damage to materials 

Evan is spot on. I know somebody that does 50/50 with his GC's and it works for him. They front material costs, etc. This is the reality, finding good contractors is HARD. So hard, many, many people get pushed out of this business or voluntarily leave it. There is no secret to finding them unfortunately. Contact as many as you can, don't hire someone you are not comfortable with, and let them go soon as it becomes clear that working with them is not in your best interest. When you do find a good one, don't get comfortable, keep building the rolodex. A contractor can be a Rockstar one day then MIA the next.

Haven't found a wholesaler here who can consistently find good deals for me. At least deals they wholesale at a price I am able to hit my target returns on. I don't blame wholesalers for wanting to maximize their profits, just results in me not being able to buy much from them so I source most of my deals in-house.  

 Hey Jeff, I am mobile and haven't had time to read through all the posts so excuse me if that has already been stated. 

Agents have to abide by Fair Housing laws so are not allowed to answer the question "is this safe". Some may but technically they aren't supposed to. They will direct you to crime maps and data sources for your own research. DM and I will be happy to give you some insight into the different areas though (I am not agent). 

For your 2nd question, "what is the rehab cost". Well, that is a toughy for anyone but especially agents. No offense to agents at all, there are some excellent agents out there but I have found most know little to nothing about the nuts and bolts of houses much less the cost to fix them. They're sales people. To be fair, what needs to be done or will be done isn't always 100% objective either. I am a GC, you could send me and another GC into a property  and we could come up with wildly different #'s if we're not on the same page on what the end goal is. Even if we were it still could be wildly off from eachothers #'s.

My wife is an agent. She rarely takes on buyers as she mostly uses her license to support our real estate business but she knows the game from both angles of retail and investment. If you're looking for referrals on a good agent(s) to interview I can connect you two, she knows some excellent agents in town she could introduce you to that work both retail and investors, just DM if you want. 

Multi's are selling for much lower cap rates than 8-10 caps in the Knoxville market. Maybe 5-7yrs ago one could find 8-10 cap properties sitting around but now you will need to do value add to get cap rates like that, if you can find them which has become increasingly more difficult around here. So kudos to OP for locating a 10 unit value add,, it's not an easy feat around here anymore. 

Just wanted to drop this note for the out of state investors licking their chops at the idea 8-10 caps are sitting on every corner in Knoxville because that is just not reality.

9 months for cosmetic work? What is the scope? What has been done and needs to be done?

 Unfortunately I have found this not to be the case. We have many transplants here, they are very active in local affairs and work to implement the same policies that they are running away from... blows my mind. 

I agree with Louis. Find out what you want to do in this biz. It needs to fire you up because while this business is fairly simple, that does not mean it's easy. I live in Knoxville and there are BRRRR's to be found but you need to look in the right places and with the right lens. Rehabbing is popular but it's not the only aspect of real estate. I have done it for a long time and I do not recommend it to most people. Many, if not most, people burnout of rehabbing/flipping pretty quick, it's a tough business with potentially large "stupid tax".

Protect your cash like a mother bear. You have a respectable chunk of money that can help you get where you want but ensure you are educated on and committed to what you are doing before spending that money, especially if you get into a rehab. The "stupid tax" in this business can be large. I think we've all paid it at some point and you will too if you get into the game but you don't want it to be so early and so large it knocks you out.