All Forum Posts by: Zach Mitchell

I really don't have specific answers to your questions but I worked for an apartment developer and we also acted as project manager. As the owner you will want to establish open lines of communication from the very start. Tell them you want at least weekly updates or more if you want. Make sure to remember that they are working for you, not the other way around. Just always remember that you are the one writing the check. 

Did you already agree to the budget and sign the contract? If not, now is the only time to set exactly what you want. You should definitely be negotiating the pricing and the schedule with him. Always expect delays in scheduling and definitely expect every dollar in the contract to be spent, including contingencies. Make sure everything that is said during conversation and negotiations is spelled out clearly in the contract.

I really couldn't say without seeing the proposed budget what line items to be aware of. Building an apartment complex is a little different than a single family home.

Good luck. 

I should also say that there are definitely items you will not need to permit but you'll be surprised how little. We try to permit as little as possible but it's pretty tricky. Good luck!

Lindsay Broome Don't listen to the previous comments. The level of permits needed all depends on what jurisdiction you are in and how strict they are. Some places you only need to permit major items and others you have to permit almost everything. If you own the home you should be able to pull an owners permit and not need a contractor to do it. However, in my area if you do that you cannot sell the property for a year so definitely check into that if you want to go that route. Permitting is one of the harder things to figure out as a beginner. I still have issues on every house. Just take it one step at a time and you'll get through it. The subs you hire should pull their own permits for those specific items (roof, mechanical, electrical, plumbing, etc) but you might need an overall building permit for the project, just depends on jurisdiction. Keep in mind you could be in the county or you could be incorporated in a city or town. This will determine who you will have to check with on permits.

I'm a newbie to the 'I quit my job' discussion. Just left in the middle of February 2015. I think I provide a more realistic view to most who are considering it than the people who built up a big portfolio before taking the leap.

What were you doing before, and what do you do now (professionally)?

I was a commercial appraiser (anything and everything outside of residential) right out of college for 4 years and then worked for an apartment developer as an analyst for about 2.5 years. I am now a full-time stay at home dad to my golden retriever, and I also flip houses. 

Is your passive or business income from real estate the same, greater, or lesser than when you were working a job?

As of today, I have made $0 in income since I left my job. While this was not fully expected, I did anticipate a few months of this since my checks from selling houses don't come nearly as often as my W-2 check came. However, once we really get the ball rolling they should be coming in much more frequently (I hope).

Do you "live the dream" and travel/vacation year round, do you focus on building your empire to ever greater heights, or do you pursue some other passion?

I wake up everyday focused on the business and what I can do to grow. I have more time than I ever had in the past to take vacations but now that it's my own business that would be the one not getting the attention it needs while I am away, it makes it very difficult to take any time off. I will have to prove to myself that I can make this business work before I will be taking any vacations. However, living the dream doesn't mean waking up in Bora Bora. I get to wake up every day and do whatever I want to do. Right now it's working on my business, next year it might be working on a new business, the year after it might be something completely different. To me that's living the dream. 

How long did it take you to build up a real estate portfolio sizable enough for you to "retire" on?

I'm nowhere near the point where I can retire on my real estate. I left one job for another but the new one is one I enjoy doing and can build to something much bigger. I've actually put myself in a worse position to be able to build a portfolio of rentals since I cannot get any sort of conventional financing for a couple of years now that I am self-employed. This was something I was willing to sacrifice though since the trade-off is being my own boss. 

How much time does your real estate business consume per month?

The stress and constant thought of needing to make this work consumes about 100% of my time. Actual work is much less. It's interesting how much harder it becomes to manage your time when you don't have specific working hours of 9-5. Leaving my job has given me the time to focus on my business and look for additional ways of producing streams of income. It's an exciting and scary time of my life but even with all of the stress, I could never go back. 

@Natalie H., new construction can be a completely different world if you have never dealt with it in any way before. Your first steps would be to check the zoning and setbacks to see if what you want is even allowed and if it will fit based on the size and shape of your site. If you determine that what you want will work you should call and talk to someone knowledgeable in the city planning division and see if you even have a chance of getting your idea approved. There's no reason to go through the whole process of engineering and architectural plans if the city has a different idea than you for your site. They know what they want throughout the city and there's not much you can do about that. 

Also, without any experience you could be really taken by the wrong contractor so if you make it to the point of looking for one make sure they come highly recommended. On your first big job like this it might make sense to pay more for a better contractor who will take you through the process. 

There's no right or wrong here, just all depends on the numbers and your level of risk.

Good luck. 

There are guys around Orlando who will refinish hardwood for $2.25/sf. I would definitely get another bid.

Congrats on pulling the trigger on your first one at 19. I wish I had started at the same age. Your questions would require an entire book but you're in luck because a lot have been written already! Check out J Scott's Book on Flipping Houses. You can find it on this site in the BP Store. That will answer all of your questions. 

I did a cash-out refi on my first deal but it was based on the after repair value. At the time, my mortgage broker told me they won't even look at you until you have owned the property for 6 months. Not sure if that was because of the large increase in the value or just standard practice. We got an 80% LTV at a rate about 50 basis points higher than what conventional 30 years were at.

There's not much that can be done with $0 but If you know the sellers personally I would start with trying to get them to do seller financing. Start with 100% financing with all cash flow going straight back to them until you reach 10% down or something like that. If the property is good enough they might want to have a part in it still. This is a VERY tough sell though.

They are in the game of deal quantity, while us rehabbers are in the game of deal quality. If you find a good wholesaler they will take all the leg work out of finding deals that you know will work. Keep in mind, I said good wholesaler. That tends to be an oxymoron in most areas, especially mine, but there are a few around. 90% of them just lock stuff up off of the MLS, mark it up $5,000, throw a few comps in an email and then send it out to buyers. I am able to do that all day long but what I don't have the time to do is proper marketing and negotiating of deals, the job of good wholesalers.