Notes – September 2016 TBI’s Networking Event

Thanks to everyone who attended the TBI’s networking event on Wednesday.

Here are the notes from the Q&A segment:

  • How do you hire/fire contractors without the concern of being sued?
    • Have all contractors sign contracts.  The contract should include the payment schedule, deadlines, scope of work, etc.  If the contractor breaches the contract, you have the right to fire them.
  • How do you set up timelines for different trades?
    • You can break down the timelines depending on the trade.  For example, ask a plumber ask how long it will take for the rough plumbing and for the finish plumbing.  Once you have the amount of time, you can work it into the construction schedule and allow them the necessary time.
  • Do you give deposits to contractors?
    • Yes, but the amount depends whether they are providing labor and materials or labor only
    • ~5% deposit for labor only contractors
    • 10%+ deposit for labor and material contractors
    • Prior to giving a deposit, you should have them sign contracts, obtain insurance paperwork, licenses, and have called references to reduce the risk of having them take off with your money
  • How many estimates do you get?
    • It’s always a good idea to get 3 estimates
    • After using a contractor on multiple projects, I will generally get 1 other price to make sure my contractor’s price is in line
  • How do you find good contractors?
    • Referrals
    • Craigslist – although these people need to be heavily screened
  • What is the best way to start investing without a lot of cash?
    • Wholesaling
      • It typically takes time, money or both to generate leads
      • Either need time, money or both to generate leads
        • Tasks that don’t require much (if any) cash – search craigslist, door knock, cold call, networking events, etc.
  • How does wholesaling work?
    • Find a seller
    • Get the property under contract by using this Agreement to Purchase Real Estate or something similar
    • Find a buyer that will buy the house for a price greater than what you have it under contract for
    • Assign the contract to the buyer using this Assignment of Contract or something similar
    • Provide both contracts to your attorney (your seller and buyer should all use your attorney to ensure there are no issues)
    • Collect your money at closing
    • I will do a future blog post about this
  • What’s the best strategy for finding properties?
    • Direct mail
    • Pocket listings
    • Networking with other investors
    • Wholesalers
  • Is it helpful to be a real estate agent?
    • Yes.  Having access to the MLS is critical to pull comps, gather information and research properties.
  • What is another method to finding public record information other than the MLS?

 

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