All Forum Posts by: Stacey Wilks

Richard, I don't need luck.  I'm confident with my numbers.

And @Anish Tolia, we will find an investor and not one that charges 18% on a million dollar loan.   $100k and $1m are two very different numbers.  An $18k return versus $100k return?  Sorry, no contest. 

Signing out - have better things to do.

I am listening, I simply don't agree.  Based on your last post, you are making assumptions and you have most of them wrong.  We know what it takes to build a house.  My husband isn't your typical Contractor.  He knows how to build a house quickly and cost-efficiently. 

If you already have plans, you can have an engineer(s) stamp it with not that much money. 

"Build entire new house, worth more than $1m" - in this area, the land is the valuable part of the property, not the structure.  We could build a very nice, 4/3 house (with a huge backyard which is rare in this area) and still make a profit.  The existing property now is worth $809,000 with the land valued at least $700,000.

Closing costs are not a concern. And we are going to negotiate the buyer's agent's commission down to 2% - they will do that all day long and still make really good money. We will sell the property ourselves with the help of a company that specializes in FSBO for a fraction of the typical 3% agent fee.

My husband will retain his job, hire his best subs and oversee the project everyday.

And how do you know we will not make a profit?  You don't even know what the house will eventually sell for.  I do.  I've done the comps.  I know this area.  We will sell it for slightly under market and I guarantee you that it will sell within 30 days.  Also, the market is only going up so we will have wiggle room.

I believe 10% is fair but if it takes a couple more percentages to get the deal done, then we will do it.           

And BTW, I wouldn't trust a project like this to anyone but my husband.  He will have complete control of the project, not the investor.

@ Steve L.

THANK YOU - finally someone who has something to offer to this conversation.

We do live in the house and she (our landlord) has given us an idea as to the number.  She is a sharp, elderly woman who grew up in this house since she was a child.  The property has been paid off for decades so she can name her price.  We've lived at this property for 7 years and she loves my husband because he's done numerous improvements to the property, mostly at our cost.     

1.  Her soft price is well below Zillow of $809,000. 

2.  We would like to do this project not as a 50/50 split between us and investor, but just as a straight interest rate of return of 10% for the investor.  Did I answer that correctly? 

2a.  Yes, as mentioned before, the investor would be 100% on title.

2b.  Yes, agreed.  My husband is always on deadline, usually earlier.  As far as budget, yes, he's always on budget and has been known to....well never mind, you wouldn't believe me ;) 

"A title search of other investors" - not sure what you mean....she solely owns it in it's entirety.  As I said earlier, she said she would give us first chance at buying it. 

As far as 10% and the "friends/family" category -

Why wouldn't 10% be enough for a RE investment of that size?  Are there other RE investments that would yield more than that (other then Texas Redeemable Tax Deeds of course)?

And we would never, ever, ever do business with friends and/or family....unless of course, we would never want to speak to them again.  It hardly ever works out, but I guess there are exceptions.     

Thank you Steve L.  Your input is well received.  Just wanted honest answers without the attitude....it is so appreciated.  Have a good night.   

@Jeanette Adler

You are welcome to your opinion but I do know what I'm talking about.  We've done it on a smaller scale and it's not rocket science.  Considering the factors (in which you are not completely aware), this is not a risky deal and it cannot be passed up.  You guys are not the only ones that we've talked to.  We've gotten many professional opinions and most are supportive.  Richard, like yourself, spoke without knowing all the facts and he was rude and discouraging (which people LOVE to do).  If I ran every time someone rudely shot down an idea, I would never have been successful.  So, sorry I won't be seeking another profession. 

Please guys, positive, constructive posts only.          

As I said before, no, we don't have any money to put up.  Up-front money is not the only value to consider here.  We would allow an investor to come into this deal, have complete ownership to a property that has immediate equity of $100k.  Of course, we would lawyer-up and protect ourselves.  In this area, deals like this are a reality.  We just have to find the right investor.  

First of all, thanks for the optimism, but please if you "don't want to be mean", then don't be mean.  There are other ways to express your opinion.  Having said that, I absolutely believe this can happen knowing our very unique market in Orange County.  We've had several RE Agents knock on our door asking if "we" want to sell because they know it's a rare find.  They are very persistent.  Our landlord has promised us first dips at the property so we're now starting to research investors. 

- We would be happy at 10%, still making a very nice profit.

- The investors would be on the title.  If things went wrong, they could turn around the next day and make a profit for $100k just on the land alone.  Also they would be getting a Professional General Contractor so they can sleep at night.  There's just not a lot of risk for them.

- We have profited very nicely on 3 flips together.  We've also owned several properties separately.

- My husband has almost 30 years Construction experience (mostly residential, some commercial) and can build a house in his sleep.  He knows this area very well and has an insane number of connections. 

So there you have it.  We are not afraid of taking risks and we do not make decisions lightly.  You can't win if you don't play, right?  I would love to come back here in a year and prove you wrong!

Thanks Brian.  Here are the specifics:  the property is a tiny 2/1 house built in the 40s; lot is 7500 sf; Zillow puts the property at $809,000; we don't have any money to put down but my husband would be the General Contractor and would not take a salary; the investor would be on the title; the property next door just sold for $949,000 (it's a tiny 2/1 house also built in the 40s with a very small studio + bath in the back.  Sold as a "3/2").  Correction on my original post - we would need approx. $1m for purchase, re-build, commissions, etc. - not $1.2m.  Any help or advice would be helpful.   

Thanks Heather.  I was thinking 10% as the absolute max considering investors aren't getting much for their money these days.  I was hoping for a 5-7% range answer.  Can you give me anymore insight?   

Hello,

My husband and I live in a rental in Orange County, CA.  We would like to buy the house, demo it, build from the ground up and sell it.  The cost of purchasing the property plus re-building is not in our budget so we need a loan from an investor.  We would need to borrow approximately $1.2m to complete the project.  It would take approximately 9 months to 1 year to complete.  What would be a fair interest rate (simple) to offer the investor?   Thanks so much!