All Forum Posts by: Will K

Great advice, and I highlighted the most important part of J's quote

Gary Bailey is spot on with his advice.

I would stress moving on to the next guy. I suggest putting a CL ad up, you'll get tons of responses from GCs looking for work. Spend a solid 1-2 weeks meeting people at the property, walking them through it, and explaining exactly what you want done, and asking them questions.

You want to look for a valid license (verify it on PA's govt website) and workman's comp (around 1-2 mill in coverage).

Don't ever do T&M, there's no incentive for them to get the work done ASAP. Also profit sharing? That is a joke and a half.

I personally look for general contractors, or guys that will do all the MEP/carpentry/finishing/etc. That way, when your contract holds them to a time limit to complete all work, say 8 weeks or something, then its all on that guy's shoulders. Sure you could save a bit of money if you split up the disciplines, but I promise you if the rehab goes over your time estimate each discipline will be blaming the other for why the project was delayed. Does this make sense?

It sounds great that you're pursuing this, but I think you're going to make some very co$tly mistakes unless you find a mentor who has experience doing this.

One tip I'll give you is that GCs are there to maximize their own profit. To give you an idea, I'll typically interview about 30-40 GCs for our rehabs, from which about 10 will submit estimates for the work. On the last house I did this for, our estimated budget was about $80,000. Estimates I received ranged from $52,500 to $415,000.

Do you think the GCs that submitted the $285,000, $340,000, and $415,000 bids were stupid? No, they knew every now and then they'd run into a novice who who had no idea what he was doing, and would have no problem taking all the profits from the flip, plus money out of that investors own pocket.

They're call CONtractors for a reason.

With potential profit margins that small you should take a long hard look at what rehab costs are going to be. Are you doing MEP work, new windows, doors, flooring? Or just cosmetic + new kitchen and bathroom?

The fact that you say "who knows, maybe $25k in rehab work" suggests that you haven't really thought much about rehab costs. I don't know the depth of your rehab, but $25k will not get you much nowadays.

Have you taken into account accurate costs of dwgs/permit fees (maybe around $3k-4k), RE fees, interest, taxes? Assume a worse case scenario for interests and taxes, i.e. 6 months, and see what the numbers look like then.

If you want to send me a scope I'd be happy to take a look at it.

Ned Carey I would love to come Ned but unfortunately its a little late notice for me, but thanks for the heads up.

Any chance you could make it down for one of the DC meetups? We're a fledgling REI group that is planning on having our next one somewhere in NW DC, probably adams morgan or columbia heights.

At this time we're looking at May 22nd, and we're also looking for speakers. Based on your posts you have a lot of experience, and I think a lot of our members could really benefit from listening to you. Let me know if you would consider it!

-Will

I've been considering real estate for a long time, which mostly includes reading books on active real estate investement, scanning RE websites, and putting in some lowball offers on homes within 1-2 hours of me. I am an electrical engineer by education, but I've realized the last few years I like the business aspect of things, and think this would be something I enjoy doing full-time.

Because I don't have the capitol or the experience to jump right into it, I have decided I would like to get into project management for smaller projects, such as single family or multifamily homes. I would like to use the rennovation and coordination experience I gain from this job to eventually start my own real estate renovation and investment company.

I would love to hear from experienced BPers who do something similar, or perhaps works in a construction/project management position for a smaller company. How you got started, what the hours are like, experience, are you typically inside or outside, or whatever else would be awesome to hear. I am sure there is a whole range of jobs that could be related to this, but I am not 100 percent certain of what I want to do, so I would love to hear about what type of jobs are out there!

-Will

Cheryl C. Wow Cheryl from those numbers it really sounds like you could be a great contributor to our meetup group. Are you a fulltime REI?

As Jason posted, he started a meetup.com group. We are trying to work out a date for the first meeting, so any feedback from other interested would be helpful.

Jason Cohen Ah excellent, you beat me to the punch. Unfortunately I am going to be out of town for the next meetup, which is too bad because I live right nearby in adams morgan. How often do you hold meetups and what does typical attendance look like?

*edit: ah i see you just made the group. Any chance we could move the date to the evening of that Monday, the 18th? I can help advertise as time gets closer.

-Will

Hey Matt Dean, Ned Carey, Jason Cohen, Chris Drury, Deirdre Brown, Travis Lauchman, Leonid Sapronov and others,

So I've met with some local DC RE investors, and the consensus I've gathered is that there is a lot of interest in starting a meetup group for DC and the surrounding area. For those not familiar with Meetup.com, its a website where you organize meetings among people with similar hobbies.

This would be a group where new, inexperienced investors like me could find mentors or partnerships for their first investment, and the more experienced investors could offer advice, find partnerships, and find investment money. I would propose that the group stay true to the biggerpockets investment philosophy, offering free help without pressure to buy anything.

I am willing to organize this group but would request help from interested locals. It seems like a hotel conference room would work well, but I have no experience organizing something like this.

I am proposing that people send me their email in a colleague request, and I will setup the meetup.com group and email everyone link invites. From this we can guage the interest, and determine a good meeting ground based on how many people RSVP to a meetup. Let me know what you all think!

-Will

Free 99? Who could complain!

I would also be interested in seeing what the cash flow is.

While I am a total newb at this, when I analyze a distressed property and try to determine a profit I would like to make on a quick turnover, I aim for something equal to or near 8-10 year’s worth of cash flow. For example, if a property cash flows $5,000 a year, I would take $50,000 profit to sell it in year 1.

To me, any profit less than that and I would rather hang on to it and reap the rewards of cash flow and appreciation.