All Forum Posts by: Joshua Berube

I don't really much on this, but from what I have read and listened to, while Ken does build, he buys most of his buildings as distressed and/or bad management. unless you are specifically talking about his new builds, this might be coincidence. but then again, I have been wrong at least one other time ( that I can think of :P )

Hello there. thank you all for the interest

I have registered for a project management course with the local construction association, which I was supposed to take mid January, but I was sicker then.. well. you know. luckily I was able to push it back, so now I'm taking it at the beginning of June. I am really looking forward to it.

I have been in talks with the city about what I can do with the property. They are frowning on trying to rezone for higher density and the community association has to agree to it, and it seems they tend not to. I am considering trying to use some of my winning personality to maybe sway their opinion, but am not sure the effort would be worth it.

the officer told me that the previous owners idea of subdividing the property wouldn't fly and also told me that the foot print cant be larger than 65% of the property. if I am to build one building, the exterior has to be built to make obvious the fact there are four dwellings there.

the officer seemed quite excited about my plans, don't know if that meant anything, but it made me feel good :)

My plan has evolved to building two side by side, top and bottom , duplexes.  that way I can live in the house currently on the property.

@Peter Crisp 

I am glad my thread led you to biggerpockets. its a great site. the pod casts are great.. so good.. anyway

this project is a definite long term hold for me. I would have no desire to sell. I understand the numbers are tight but this seems it has good potential, and since I am not overly tied to the property, I can still walk away, albeit with an expensive lesson.

I can cut down on some of the cost because I am going to GC the project and can do some of the jobs myself, like drywall, because its what I do for a living.

@John D. 

 thank you for your interest.

@Pawan J. 

thank you for the advice. I would love to take a look at your PDF'S, I really appreciate the offer.

I am happy with my decision to do a lease option. I feel it gives me more options.

my lawyer was worried about me possibly losing the property, but that has all been sorted out. my option is registered on title and I have all the paper work.

I agree with your bit on reputation. It has been on my mind and focus for awhile now. I definitely want to be a man of my word.

if any of you are in town, let me know! we can meet for a coffee!

again, thank you for the interest. I will keep updating

Joshua

I know that I have a lot of time to figure this out, however it is on my mind now.

 I really like the long term prospects for this property and the surrounding neighborhood, so I really like holding the property as a plex. the long term value of holding one of the few multis in the area would be immense. Also having a solid property would allow me to get a line of credit against it.

but it would be harder to finance and the payout further down the line.

anyway its something for me to think about.

iooking at thjs property, i automatically decided that i wanted to build a multi family, thinking that would the highest and best use. I didnt consider subdividing. 

Owing houses really doesnt excite me.  Multis do. That being said, it would be far easier for me to build one house at a time. It would give me a far faster return so i could pay my loan back. 

okay, its been a little over a week since I last updated. was supposed to on Saturday, but I got distracted. so here I am.

Since I last updated, I have received the appointment of agent, I have confirmed with the lawyer that he will register the option on title, and I have met with the seller.

I had a bad feeling when I first received the A.O.A. form, because the Ed ( the sellers agent ) had put my name as Jason. He knows well that my name is Joshua, so I made him aware of the mistake and his reply was that 'its not important, the city wont even check.' I told him that doesn't make sense, at all, and I would like it fixed. he has since fixed the mistake and I have received a corrected form, but that bothered me a little.

The seller wasn't what I had pictured. I don't know why, but when I heard that he owned his own business, I imagined a proper business stereotype  really nice guy, but not at all what I had pictured.

he told me that his plan for the property was to build two 3/2 houses on the front portion and a duplex on the back half, facing the alley.

this is going to be a dry read... Im still excited!

going to pick up the real estate development book tonight. Some beavy reading ahead

It has been a week since I have posted. In that time, I have meet with a lawyer and have put the deposit down.

 the first thing the lawyer said after looking over the lease/option papers, was 'can you get out of this?' which kind of made my heart sink. His worries:

-if I build on the land during the lease, I could end up losing the property in foreclosure if the owner defaults

-I put too much money down as a option fee, he feels I'm gambling

-there isn't any wording in the contract on who will take care of structural problems i.e.: roof leaks/replacing

he basically looked at me like I was an idiot, until I told me

-I don't plan on building on the property before I own it, the seller is giving me the paper work to talk to the city and see if the building was viable.

-He is probably right. The owner accepted it right away, I should have offered a smaller fee to start off with. but the fee is being taken off the sale price, so in my head it will help me out in the future because the price will lower in three years.

- I am gambling a little. I think it is a educated gamble, but it is a gamble none the less. I am gambling that the city's downtown rejuvenates as per its plan, and the ferry is successful. I am fairly comfortable with this risk because, the lots is the largest on its street with the smallest house. it is close to a major road and walking distance to amenities and even though I am using someone else's money, its a small enough amount that I can pay it back fairly quickly with my wages. 

- I'm not to worried about the structure. I'm not renting it out, Im going to live in it. I can put up with a lot. if and when I buy the place, I imagine the lender is going to want an inspection but my whole plan is tearing the building down and building new. if there is a problem I will cross that bridge when I get there.

Once I explained my plan, he calmed down a bit and asked why I'm not doing a rent to own with the partial rent going to the final price. I told him it was over CRA concerns and he replied that it would be more of a seller issue than the buyers. I don't want issues on either end so I'm happy with the LO.

He told me that the next step would be registering the option to purchase on title, but it cannot be registered as is and I need to fill out a form 'C'.  so Ill be looking at doing that on Monday ore Tuesday.

I asked him about my future plans and whether or not he could do what I needed. he said that she could but since I will be up island I should find one there. I replied that I wanted a person who will look at me like he did as they give me hard truths and call me an idiot. he smiled slightly (he is a fairly elderly Chinese fellow)  I think I might have earned a little respect right there :)

So the lease is signed and I am moving forward.

I have been trying to think about how I can keep moving forward from here. My fear is that once I get into the house I will get comfortable and not feel the urgency to keep pushing. I understand that I am moving into a phase where there will be a fair amount of waiting, but there will be times I NEED to get something done, I am worried I wont know the difference. that might sound weird, but this is the stage where I don't know what I don't know.

upon the execution of the lease, I get the assignment of agent.

this is where I am not sure of next steps.

I would like to talk to a couple private lenders to see where I need to be in order to get financing. 

do I need to get plans for the building first? to figure out how much it is going to cost? that doesn't make too much sense to me because I wont be building until I own.. but If I don't get the plans/cost I cant really start to go through my circle of influence to pitch.. 

any ideas or suggestions at this point would be greatly appreciated.

So my plan for this week is to:

-get the option to purchase registered

-talk to the seller to get keys and the A.A form

-?

There are many things I would have done differently already. 

 -I should have offered a lower option fee. I like the fact that the future price is lower, but I could have used that money in the short term to invest else where. There is a possibility that I will try and do a flip in the time I am leasing to increase my capital, the extra money would have been useful

-everything seems... too easy. I have a feeling that the sellers agent wasn't being honest with me about a few things. I think that the owner owes less than the agent told me, when I made my original offer I said my offer is what he owes on the property, the agent told me it was 180,000 so I just assumed he was telling me the truth. how would I check that? I need to have a stiffer back bone when it comes to the negotiation..

-I would have got a lawyer far earlier in the process. he brought up some really good points which would have cost me dearly if I was buying the property out right.

so this is where I am. Sorry about the novel but as they say in Quebec "C'est la vie"

I will update again next Saturday, but will reply to any posts.

Have a great day and Happy investing

Joshua

Hi all.

 I just finished listening to J Scott's second interview and he was talking about the problems he experienced while doing a spec build at a distance. he mentioned that he didn't have any problems which would sink a new build, and since I am planning on building soon I was wondering,

What problems are out there that can sink a new construction project? Have you experienced this at all?

I imagine scenarios like

-losing financing half way through construction (how can that happen anyway? poor planning?/)

-mistake on the pilings/foundations

-thief?

-fire

I feel like Im starting to reach here... if there are any out there who have stories to tell, I would love to hear them

joshua

its not about real estate per se but about the mindset of the investor, would that go into the off topic?