All Forum Posts by: Tom Scott

Today I visited my first rehab prospect. I took my pad and paper, flashlight and a tape measure. What other tools do you take with you? I thought a ladder may be useful, but might be overkill. The only thing I had a hard time measuring was the roof but I just added some slop into the measurement to be safe. Tom

So I'm moving toward finding a deal to rehab and flip, I've got a few leads already, and I need to start investigating financing. I'm curious what the etiquette is for presenting deals in the market place when searching for financiers / business partners. Is it even a viable option to receive private money on my first deal (i.e. will anyone even take a risk on me?)? I have enough cash for a down payment on a loan or to fund the rehab but not both. So how does a rookie go about presenting a deal in the marketplace in order to help ensure interest and success? Additionally, what kind of terms should I expect to receive? I'd be willing to split my fisrt deal 50/50 if the financier would fund it 100%.

I have no history of rehab projects but I am employed as a project engineer at an electrical utility so planning and managing large projects is what I do day in and day out. So in a way I do have have experience, just no track record.

Tom

I appreciate the information guys. I'm not sure I want the risk of the IRS getting involved in anything I do. I was simply looking at my options to get my first deal underway. I'm not sure I want the hassles that seem to come along with the ROBS route. At this point I think I need to decide whether to get investor dollars or use a 401K loan or a mixture of both. If all goes well I will only need to use either for the first few deals until I get my war chest built up.

Tom

So, I would only be able to invest in a legal entity that I do not control?

Tom

Hello all,

As part of my Roth 401K plan I am able to use a portion of my account balance as a self directed investment account. I know I am able to invest that money directly in real estate with the caveat that all profits go back into the retirement account as earnings. This is of course good, but then all my profits are tied up in the investment account and I can't access without penalty. Would it be possible to invest this 401K money in my rehabbing company which will then pay a set interest rate to the 401K. I would essentially be my own hard money lender.

So, am I crazy or is this illegal? I'm guessing if there is a legal question it would be due to my proximity to the investment?

Tom

Rod,

I am probably not in the market for a GC. The project is small enough I can mange it by myself without footing the bill for a GC. If he would be willing to pass along the numbers for some of his subs that would be great but otherwise I'm afraid the job just doesn't call for that level of supervision.

Manny,

I appreciate the invite, but I'm no longer int he Orlando area and though the meeting may be educational, I just can't justify the trip for such a small project.

Tom

I'm looking to start work in the next month or so. I appreciate your input though.

Tom

Hello all, I am helping my mother get her home in Clermont ready to sell and I am looking for referrals for an agent. She is officially moved out and we are planning a few small projects to get the place cleaned up and ready to show. The property is a 5 acre horse farm on a small lake in the Minneola area. The house is around 2500 sqft if memory serves. The property has a 4 stall barn with a small apartment in it and a simple boat dock down at the lake. I need someone who knows the market for this type of property and can give me an honest no BS assessment of value. This will be a decent commission so I need someone with experience moving this type of property and I will need to see a track record to prove it. Any suggestions are greatly appreciated.

Thanks,

Tom

Hello everyone, I am in the need for a few trustworthy contractors in the Clermont / Orlando Area. My mother has a house in Clermont and in order to help her out and gain a little more rehab type experience, I am going to be managing a few projects for her so that she can sell in the next few months. My main areas of need are below.

1.Roofer

2. Flooring (tile or hardwood)

3. Painter (exterior and interior)

4. Cabinets (either refinishing or replacing, not sure yet)

My main requirement is that they be trustworthy and that they do quality work with little to no hand holding. The house is vacant and I am about 2 hours away so I would rather not have to drive down there to give instructions about every little thing. Tech savvy and able to interact through email would be a plus but not a deal killer as long as I can reach them by phone easily.

Thanks,

Tom

Hey guys, thanks for the feedback. To address Chris's question, I've been involved with many different type of construction so I'd be confident in my ability to build a house by myself, so biting off more than I can chew is really a non issue. I'm fine buying just about anything as long as the margins work.

My main concern is if I am wasting time looking at homes that are in good mechanical shape, but are a few decades out of date. The few posts above would suggest that until they have been on market for 90+ days the discount won't be enough to make the margin work.

Tom