All Forum Posts by: Jon Christian

Looking to have a garage slab poured (24 x 24 x 4" deep) and wanted to get some ideas on what others have paid.

I'm looking at building whole houses and detached garages. Where would I begin my search for contractors that I would want to continue to use project after project?

Hi all. 

My real estate agent buddy, whom I've known for a long time, wants me to loan him $7500 for a max of 45 days to pay off his contractors while his investment property flip closes. I don't have any reason to distrust his intentions as he's helped me close on a few deals and he lives and owns right around the corner; ie: he's low risk for fleeing the state for this amount.

I had him write up a contract that says the following: 

This agreement covers the personal loan provided by (loaner) to (borrower), signed into effect on x x , 2020. The terms of the agreement are as follows:

-(loaner) will loan (borrower) $7,500 (principal loan)

-(borrower) will repay (loaner) the principal loan amount of $7,500 plus 10% interest of the principal loan ($750) which brings the total repayment to $8,250.

-(borrower) will have 45 days from the day the money is received to repay the loan & interest total of $8,250 to (loaner)

-The money will be used for (borrower)s investment property, at (address) for roofing, staging, lender dues, and materials/supplies

-If (borrower) is not able to pay the loan back within 45 days, an additional $500 penalty will be assessed for every 15 additional days it takes to repay the loan in full. For example, if it takes 60 days to pay the loan back for example, (borrower) will owe (loaner)$7,500 principal + $750 interest + $500 penalty = $8,750. If it takes 75 or less days there will be a $1,000 penalty. This penalty amount continues to increase by $500 for every 15 days outstanding until the loan is repaid.

We will both then sign the agreement.

Pretty straightforward but am I not considering something to protect me, like actual collateral? Any advice would helpful.

There's a home near me for sale off market. Asking price is $85k. Repairs needed are $40k. Comps suggest the house would sell for $165k conservatively in a very hot neighborhood of the city. Some of the homes nearby are going for $200k. It's a 2 bed 1 bath single family house.

At first glance using the 70% rule, the purchase price should be around $75k. However, the home has had a few offers of at least asking price of $85k. What are those investors seeing that I am not? What metrics are they probably looking at? Would this be a purchase you would consider at 85K?

HI All. Great reads on this website. I've learned alot about investing in Real Estate in the two hours I've thus spent on here.

So... I've come across a house that needs rehab that I intend to flip. I am using hard cash to buy the house and a loan to finance the rehab. I came across a man who seems to know his stuff in terms of construction and wants to potentially partner up on this fix and flip job. The basic scenario is I finance the project and he does the work - subcontracting out jobs when necessary. He mentioned a 50/50 split in the profits would be the take away. 

At this point, you are probably wondering why I wouldn't just hire out the work if he wants 50 percent. It doesn't take a genius to know that a 50/50 split of the profits is clearly in his benefit considering he has no financial risk in the project, other than time, since he is not financing any of it. If he is as good as he says he is, the projected cost of rehab could be half of hiring the work out though which makes the proposition intriguing. Key word is could. Also, I would have a great partner for future investments if he is as good as he claims to be. There are alot of risks on my part, like if he can stick to the budget, finish on time, do everything that needs to be done, be dependable, etc. He has proven that he knows his stuff at the very least.

Anyway, I'm trying to come up with a fair scenario that would work for both of us - one in which would leverage the risk involved for both parties. Perhaps I hire him out and pay a bonus at the end? Perhaps I buy the house, he fronts cost for material and we do split profits? There are a few scenarios swimming in my head but wanted to get input from others that may have been in this situation. Thanks for any advice!