Private Money Partnering

Presenting The Deal

Chapter K. (continued)

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JOE: Again just jumping back, and this something I think of, I've had friends that live in large houses where they've added on additions or done a kitchen or two. They have nightmare stories, horror stories of contractors, and I use that word loosely. In that they don't show up on time, they say they’re going to do something and they don't do it.

My questions is, going back to this repair stuff on the house deal, do you know the people that you will be hiring? Have you seen the jobs they've done and checked their references? Again, I'm more of a visual person. I like to sit down with the numbers, I like to sit down with things in writing more when I have time and I can get my frame of mind where I want it to be. I would enjoy seeing three different bids, give them the same job, but have three different bids from three different individuals or companies.

The second thing I jump back to and I event could be wrong, with real estate the three words are location, location, location. And I'm not real familiar with Decatur. If you could bring me up to speed and you kind of have with this subject house itself, then we have the street, then we have the neighborhood, and then we would deal with Decatur and then with accounting. And you said Decatur, so we’re dealing with county and city, the city of Decatur, correct? So, I start thinking about the permits and maybe I'm getting too deep but I'm just wanting to ask some questions.

DAN: OK, Joe, you’re approaching this in the right manner, to do all your due diligence. To tell you first of all about Decatur. Let me say this. It’s a bedroom community for Atlanta. Everyone has to live somewhere. All the other houses on the neighborhood are occupied, so people are going to live there, regardless of the county or city. People are going to live there and they’re going to pay green money to do that. So that really is not a great concern.

What we’re looking for is to put our money in, fix this house up, sell it, take our profit and move onto another one. I really don't think we need to get too hung up on the neighborhood. Houses in the neighborhood sell for $70-$75,000, so coming in with one that will sell for $60-$65,000 and give us an adequate profit, it certainly makes it a marketable house. I think that is a concern we really don't have to worry too much about.

The neighborhood itself is a working class street. It’s mixed in terms of some of the blocks being a little rundown, some of them fixed up. This particular one is the worst house on the street. It’s not the best one on the street, so we will have people moving up to move into that neighborhood. I think it’s in an area where we won't have problems finding a qualified buyer.

As far as the permits and so forth are concerned, I expect to do most of this work myself. The roofer has done three jobs for me. He has always done an excellent job. One of the roofs leaked, and he came back and fixed it right away. The plumber, as you can see, I have two alternatives on the sheet, both of whom have done work for me before, one on my personal house, and they've both done a good job. The rest of the stuff, the painting, the shutters, and stuff like that I except to do my self.

JOE: Well, definitely you've piqued my interest with the projected profit that can be made, I also like that you were conservative in that you didn't say we’re going to sell it for what the market will bear. You had a little bit of a discount in there. Therefore we should be able to sell it quicker.

Presenting The Deal - Chapter K (continued)