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Managing Contractors During Home Rehabs

Whether you have purchased a home for yourself and your family to live in, or one you intend to use as a rental property, rehabilitation work is often necessary before anyone could move in. Even if you reside in the home, rehabilitation processes might be required to make it more livable and attractive. However, you need to go about it correctly or what should be a simple project can become expensive and time-consuming.

For most rehabilitation processes you will need more than one contractor. From the foundation to the roof, there are some specialties within the construction industry. Often, specific tasks must be completed by one group before another contractor and his team can come in and handle their job. This type of rotation might occur multiple times during the rehab and can be quite frustrating to manage for those who lack the experience to do so.

While you can attempt to set up everything yourself, many homeowners find that it is easier to hire a general contractor who oversees the entire renovation project. This person will be able to organize the services that you need, as well as the providers to take care of things. Of course, you need to be sure that you hire a good general contractor that you can trust to manage the situation with professional expertise.

If you don’t want to pay someone else to manage the teams for you, it will fall on your shoulders to take care of matters instead. If you have experience in management, that will give you a good start on handling the situation comfortably. However, even those who don’t have managerial experience can still take advantage of basic management techniques when it comes to the contractors.

No matter who is handling the management of the rehab, you need to be sure that everyone entering your home or on your property has the appropriate qualifications. The contracting companies should all be appropriately licensed and insured.

Look into the reputations of the company as well, adding the word “review” to the end of the contractor name before striking the enter key on your favorite search engine. The resulting search engine suggestions should give you an idea of customer satisfaction. Scan through some of the reviews to ensure that they are legitimate.

Before you can start choosing contractors though, you need to know what kind of work is needed, so you know who to hire for the task. Write out a list of the things that you know about, and have a professional consult with you regarding what additional work is necessary. For instance, you might not realize that the addition of a particular feature requires rewiring or installing new plumbing. Asking an expert first will help to ensure that you remain within budget.

Speaking of budget, you need to have it well established before you start. While there will almost always be a few extras that pop up along the way, prepare for them. When reviewing contracts for the people doing the work, make sure that the estimate is very detailed. Also, inquire about what other fees might show up based on common problems encountered in situations similar to yours.

Obtain estimates from two to four different contractors for each of the ones that you will need for the project. However, don’t limit your choices to those with the lowest projected rates. Pay attention to how their representative treated you during the interactions.

Additionally, make sure that the contractors you choose have a positive working relationship with each other. You don’t want to inadvertently get you and your house repairs mixed up in some squabble unrelated to you!

Keeping contractors in order while you are working on home rehab projects can be challenging. Make sure that they work well together and consider using a large chart to show the progress and how it should be going. This chart will help to keep the contractors on time and provide you a base for conversation regarding lagging completion times. Enjoy it all when finished!

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Cash Flow Management For Your Income Property

Are you interested in making money via real estate investments? Do you already have the property that you want to rent out, but have concerns about how to do so? If so, you need to understand cash flow management techniques and how to protect yourself and your investment.

The basics of cash flow management are incredibly simple. However, the details of it can become complicated quickly. If you don’t account for the unexpected, you might find yourself in a difficult financial situation.

The total cash coming in from the property might include things beyond the rent. You have various fees to charge tenants, including those for applications and being late on the lease. If you have an apartment building with on-site laundry, you will have to account for that as well. For those renting out a commercial space, any vending machines or similar products might be an additional source of cash as well.

It is essential while you are making these calculations that you err on the conservative side. Remember that your units might not all be rented out at any given time and that some people will ditch you and their rent.

Now, when it comes to expenses, the mortgage is just the beginning of the list of things that you are going to pay throughout the year. You need insurance for the mortgage, and might also have responsibility for some or all of the utilities. Keep in mind that if you are footing the bill for these things that your tenants might end up using more of the resource. While that is normal, don’t let it catch you by surprise when the bills start rolling in.

As for insurance, the mortgage is at the top of the list, but it is probably not alone. You will need to protect the land in numerous ways, including from floods, earthquakes and other natural disasters that might strike your area. Regular insurance policies for residential and commercial properties do not cover these types of accidents.

Also, you will have to keep the property itself up to par. General maintenance work will come along regular, along with repairs. If the lawn needs tending, that responsibility falls on your shoulders as well. Even if you don’t hire contractors to handle these services, you will need to catalog your expenditures related to it, including the lawnmower and upkeep for it.

As you can see, the things that fall within the expenditures list can become quite extensive very fast. This record hasn’t even touched on the taxes that you have to pay for your rental property! Likewise, payments that occur on a quarterly, bi-annual or annual basis also need to be accounted for in your calculations.

One of the things that you can do to help protect yourself is to perform a thorough background check on the applicants. While you can’t, and shouldn’t, discriminate against anyone, you do need to make sure that they have a positive rental history and personal references that you can verify. Additionally, make sure that the income is legitimate.

One way that you can reduce some of the headaches and hassles involved with managing the place is to hire a property management agency to handle much of it for you. While you need to be an informed participant in the process, you won’t have to worry about the day-to-day hassles associated with taking care of everything.

Whether you are the owner of residential or commercial land that you would like to use for income property, it is essential that you understand how the financial structure works. Speak to an attorney regarding your rights, responsibilities and the best way to handle the situation. These experts can advise you on matters like creating an LLC to separate your assets from the property.

Then, you can determine the best way to proceed. Proper preparation will help you sleep better at night, knowing that you have made sound financial choices.

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Pro Formas and Flipping Investment Property

Pro-formas are an essential for people who are serious about real estate development. They offer a snapshot idea of the future, based on the data that is available, and your knowledge of the current market, and future trends. If you are evaluating a new development opportunity, then you will need to be able to make a sound case for that development to any potential partners and lenders. The pro-forma is a massive part of making that argument. Modeling a pro-forma takes some skill and experience. The basic mechanics are simple Рmoney is invested into a project and is used to create or improve the project, then that money comes out in return on the investment. You can find a site the implements pro-forma modeling for flipping houses if you click here.

Why Build From Scratch?

There are pre-made proformas out there, and they can be useful for giving you an idea of what is the best practice. However, if you are building a model for a significant build, then it is a good idea to do so from scratch. Pick a project that you are considering developing, and start breaking that project down. Start with your assumptions – these are things that you already know. Lay out the size of the site, any constraints, land acquisition costs, zoning issues, tax payments, etc. Next, lay out the development and construction schedule. This schedule will, of course, be a set of estimates at the moment. These assessments will get more detailed and more useful as the project goes on.

Have a Clear Target

Stop to think about the scope of the building project. Are you looking for a small rental property, an apartment community, a single home, or a retail strip? The range may change as the project goes on but having an idea of what it is now will be helpful – especially if you need to get planning permission or need to take into account existing land uses.

As the project evolves, you will find yourself coming back to the proforma and changing it. The more you know, the more readily you will be able to work on the project and the easier it will get to plan expenses and calculate returns.

There are pro-forma templates that can be used to help you set up your analysis, but they are most useful when you are looking for guidance on what inputs and projections are essential. A good pro-forma will give you the framework that you need for your calculations, but you should never rely on someone else’s figures – make sure that you fully understand the project before you start putting money into it.

Be Flexible

Remember that every project is different and that depending on the scale of the project and the area you will have to work on various issues. As a part of your initial feasibility study, you will need to think about the advance cash you have, the amount you will be borrowing, the financing terms offered by the lender, and then the expected return. Remember that if your project goes over schedule or you need more repair work done on a property than you expected, then this can have a significant impact on the project. The various models that are available will help you to predict your return on investment, but you need to build in the possibility that you will end up facing unforeseen expenses.

There is always some possibility of capital appreciation, however, if your model is based entirely on the idea that you will see capital appreciation, then look at rental property rather than flipping. The rental property will give you a steady stream of income from tenants, and rent can change based on the current value of property in that area. If you are flipping, then you need to buy at a discount and be able to do repairs cheaply enough that you will come away ready to sell at a profit – even assuming that property prices remain relatively unchanged. You also need to be able to cover costs or sit on a property if the market dips.

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Budgeting Wisely For Home Renovations

You’ve been thinking about it for a while now, and the time has finally arrived. You want to invest a little money in your house, and why shouldn’t you? Even the most basic renovation can give a room or area new meaning. But there is also the issue of doing it all according to a budget, which can turn into a nightmare if you don’t prepare adequately. Plus, the thrill of making such a necessary change can make anybody overspend.

And this is what this article is going to focus on – budgeting wisely for home renovations. If you want to know how you can get those dream renovations done without lowering your quality of life, you are in the right place.

1. Get A Rough Estimation

At the moment, your ideas are still just ideas, and you need to get them out into reality. And if this is your very first time renovating, you’ll quickly learn how different the result can be. But the point is, you want to adopt a more realistic perspective based on things like where you are going to find what you are looking for. Are those specific tiles you have in mind readily available? Or do you need to order them from some far-off country, which can get expensive?

You want to get a rough estimation of how much your home renovation ideas are going to cost. A quick search online can bring up the latest prices, and you can add up whether your thoughts need a little more trimming.

However, it won’t hurt if you get a little specific with the prices. Depending on how tight your budget is, of course.

2. Compare Your Estimation With Your Budget

This step is the part you are either going to love or hate. More specifically, this is the part where you meet the final tribunal, namely, your budget.

How does your estimation compare to your budget? And remember, you don’t want this renovation to become a big chip on your shoulders. It should only be a consideration if it doesn’t add too much financial strain.

Always be realistic with yourself in this regard. Otherwise, you will end up hating the beautiful changes you’ve made.

3. Get Enough Quotes

It is never a good idea to just go with the first general contractors quote you get, primarily if you don’t undertake renovations on a regular basis. Companies are competing against each other, meaning you might find a quote that’s more affordable but doesn’t necessarily imply sub-par quality.

In addition to getting quotes, keep in mind how well you communicate with each one. Seeing as they will be responsible for making your ideas a reality, you want them to understand what you need.

4. The Budget Doesn’t Allow It – What Now?

For some homeowners, a financial roadblock might present itself. The budget is just a little too tight, leaving you with two options.

– Save some more and do the home renovations when you have all the money, which is probably the best way to go

– Trimming more from your ideas and simplifying the renovation according to what you can afford

As mentioned earlier, a home renovation shouldn’t be eating into your lifestyle. So, making unnecessary loans isn’t always the best way to go.

Instead, try to trim some of the items on your list. Alternatively, you can find tiles that aren’t as expensive but still present well. In fact, an excellent way to start trimming is to prioritize. What do you need most and where do you need it? What is extra?

5. Have Fun

Even if you don’t have the biggest budget in the world, a few smart choices are all you need to bring about that change you want. Take the time to enjoy it. After making all those tough decisions, you deserve to sit back and enjoy the view.

And the best part is that you’ll do it on a budget that won’t keep you up at night.

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Super Website for Securing What is Owed to You

We understand the pains of having to collect from troublesome tenants. Real estate investors today are faced with a complicated set of issues as they try to grow their portfolio of income-producing properties. Nothing ever seems to go as planned, so it is a very good idea to have a team of dedicated experts ready to handle the most invasive challenges. We are here for you in that role.

You’ll never again have to worry about hounding tenants for your rent. No need to worry about going through the eviction process, no matter what state you call home. We are here to help you fix every issue that will come your way. Let us be your investment wingmen. You’ll see lots of fresh and exciting content coming that will be helpful for all areas of your business. We have created this blog to be your ultimate resource.

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