The deal is that I’m new to this investing/rehab stuff. I secured a HELOC & some cash. Found a local rehab guy, now before I find a property what is it, that I should do?
Some questions are:
How are the costs handled? If he only does X,Y and Z how do we handle paying for A,B and C? Should I look for someone that can do A to Z (don’t think anyone does,but should I look to find someone that can do the most?)?
Should I draw/work out a contract, to be signed when I get a property? Do you use the same contract for all deals or do you make a new one each time out of a template? Any ideas where I could get a template.
Should I bring to a property ONLY when I need him (I.E. need to figure out a repair costs)?
Does the rehab guy go on the deed?
Bonus Question: How much would you encourage an investor to have a website?
Should the rehab-contractor be on the deed? Unless he’s forking out half the costs, down payment, monthly payments and/or sharing in the profits… no. Having him on the deed means you’ll need his signature when it’s time to sell… and you don’t want to give some total stranger with no $$ investment in your property that sort of power.
As for website… a website to do what? Announce you buy properties? Show your works in progress? Sell your properties?? You won’t have time to be updating a website when rehabbing a house and finding a way to advertise, it’s easier to use http://www.fsbo.com or similar sites, or get a realtor. But I see no upside to having a website at all.
My thoughts on contractors is that if you ask them "Do you also do… ", the answer you get will be usually based on (a) how badly they need business that month or (b) their pride and least likely (c) an honest answer. If you need windows, first check with a window-guy. But if you ask a tile-guy whether he also does roofing, plumbing or patios there’s the chance he’ll say ‘Yes!’ while asking himself, “Now what aisle in Home Depot did I see that book on Patios?”.
Now, some guys really are pretty talented with a wide variety of experience. They actually have done patios, roofing and plumbing. Ask to see a book of pictures with their work or references from past clients. The more they claim they can do, the more skeptical you gotta be, in my opinion. General rule of thumb… the more complicated or precise the job… the more you want to go with someone specialized in that field.
A website can be handy. It does bring in business, inquiries.
It just needs to be simple to follow.
Use word inset a picture and description of the properties is all you really need, save as web page and you have a simple design just to list your own homes, if you’re wanting to avoid realtor fees, use the fsbo as an aide towards it too if you feel.
Here’s a little more background on how I feel about business websites…
I’ve been tutoring, repairing computers for years and in the process set up websites for small businesses. On the one hand, today people expect a website just like they expect business cards. It -can- be useful, from a logical point of view. But let me share a recent experience I had…
I went to a Realtor’s Convention in San Diego a few months ago. We were in a banquet room that fit about 700 realtors and loan officers. The speaker had everyone stand up that had a business website. About 99% stood up. He then said, “If your website has given you a business lead that lead to a transaction in the last six months, stay standing. Otherwise, sit down.”. About half of the room sat down.
Then he said, “Same question… but in the last three months.”. Out of 700+ people, only about 35 people were left standing. Finally, he said, “Same question… but in the last two months.”. Only two people were left standing.
The point was, websites only generate business if they are getting traffic, and LOTS of it. Without the traffic, it’s just a file sitting on a server somewhere… waiting for someone to visit it.
So when a person is involved in Rehabbing… that’s why I really question the need for a website. Like I said, it’s more like an electric business card you’re expected to have… but if you want to sell your property, it’s more productive to list it with a place like http://www.fsbo.com or a similar site that is pulling in thousands of visitors a day.
Put the rehab guy on the deed? Have you worked with any contractors? Just kidding. Unless they are a full fledged partner in the business (and don’t operate another venture that you aren’t involved in, don’t). You put him/her on the deed and you are stuck. Let’s say they get tired of the job, back out, take a position elsewhere, go bankrupt, etc… No need to put him/her on the deed. This can be worked out contractually.
Your contractor should have a standard contract that will suit your needs. This shouldn’t fall on you.
You might find a contractor who is a “jack of all trades”. But, as the saying goes “master of none”. There are good contractors who can do just about everything. However, the level of work, probably isn’t where a specialist will be. I would bring an electrician and plumber in for anything major in those areas.
Henry, the company that set up your web site isn’t helping you by framing some content on their site. It looks nice to have your domain name at the top on every page, but your content won’t get indexed properly.
Having your own site is nice. You never know what will happen going forward. You can have a site as a simple progress page. It also allows you control over what someone sees when you are listing a house for sale. You can send people to the site and generate leads. Why limit to 4 photos at a fsbo site. Include 30 on your own. As you can tell, I am a proponent of a site. Don’t limit it to this property. Pick a general, yet geographically targeted name, and build a simple site. Use something like www.googlepages.com to start, but use your own domain name. You can do a lot for free and you never know where that might lead you.