Real Estate Investing Adventures

Importance in Selecting a Good Contractor

Selecting the contractor for your real estate development is one of the most important things you will do for each real estate investment you start. The wrong contractor will not only cost you time and money, but also provide such an unlimited amount of aggravation that you will question your decision to ever get involved in commercial real estate. Screw this up and odds are real high that you won’t make those profits you were counting on. Read the rest of this entry »

There is probably a number of people out there with questions concerning this blog or real estate investment and development in general. Pressing the “Ask Me A Question” button brings you to this post. Ask me a question in the comment fields below after pushing the button and I will do my best to get you a truthful answer.

Real Estate Investment Professionals

If you have read the previous posts, you will see that we learned one of our lessons we shared the hard way. We were not ready to do business immediately. Although we had hired an architect and were buying our land, we didn’t have a lot of things in place that we should have by now. At this point in time, we still needed to:

• Set up a company. LLC or S Corp?
• Find an accountant.
• Select a lawyer
• Set up a bank account
• Establish an accounting system
• Obtain insurance

If you are going to succeed in real estate investment or development, you need to assemble a good team of smart professionals. It will cost you some money upfront, but the value of their advice and mentoring will far exceed your costs. Read the rest of this entry »

Adding Value to Your Development Deal

My previous post discussed how we selected our architect. This post addresses how we chose the building lot. This would be a major decision since the cost was a significant portion of our overall development. Our initial financial model had the land estimated at $500,000 of the overall $1,323,062 in estimated costs or 38% of our development. You can believe we wanted to have a strategy for maximizing our value. Remember from one of my previous posts - You make your money on the cost side. What you pay will dictate how much you will make. Read the rest of this entry »

Real Estate Development Tasks

Once we received our commitment letter from the bank, we had three major tasks to accomplish. We ran these tasks in parallel. They were:

• Choosing our architect
• Choosing our contractor
• Picking our building lot

This post addresses how we chose our architect. Investigating all the architects currently working in the lake development we had targeted revealed that the average price for a set of house plans along with the construction inspections and support was running around $50,000. One “name” architect was getting $100,000! Typical architectural fees run 6% to 8% of the cost of construction. At a total home building cost of $640,000 as listed in our initial financial model, we expected design fees of $38,400 to $51,200. We obviously wanted to hire someone at the lower end of the range who could still produce the quality level we needed. Read the rest of this entry »

I remember when I landed my first job out of college. It was a good job with good pay. I thought I had it made. I was living away from my family in another state. Christmas was coming and I didn’t have any extra money for gifts and I just thought I would go down to the bank and borrow $1,000 for gifts and travel money. To my surprise, the banks would be happy to lend me $1,000 if I had a thousand dollars in liquid assets, otherwise I was out of luck. I don’t think they quite understood that if I had a thousand dollars somewhere else, I wouldn’t need to borrow a thousand in the first place! Maybe they did. Read the rest of this entry »