Real Estate Investing Adventures

As discussed in a previous post, the development we were building in has its own dedicated sales team. It made sense to have them represent us for a number of reasons:

• They ran both a national and regional advertising campaign
• They typically showed all available properties to potential customers no matter how them became interested in the development
• They were physically located at the development and were selling only this development every day Read the rest of this entry »

Never enter into a contract with a contractor without a defined schedule as part of the contract itself. Just agreeing on an end date isn’t good enough. Why? Because no matter how far behind schedule your project is, the contractor will always insist he can still make the end date. Without some agreed to schedule definition, it is near impossible to successfully argue the point.

Construction Schedule Level of Detail

You don’t need a 6 inch thick stack of paper with 3,000 activities to manage the typical types of developments a single investor will do. However, at a minimum I insist on 15 to 20 very clear and measurable milestones. These would include items such as: Read the rest of this entry »

You want your contractor to provide you the highest quality project, in the shortest time frame for the most inexpensive price. What we call the three-legged stool. Unfortunately, some of these desires are in direct conflict with one another. For example, it is tough to get the highest quality project when the schedule is very aggressive. In my opinion, cash is still king and this post will discuss a number of ways to protect your cash.

Managing Contractor Payment Applications

You typically pay your contractor from a payment application which lists the various work items, their values, the percent complete the work is for this payment period and the amount due on each work item for this pay period. The estimate listing in this previous post is typical of the work items that may be on a payment application. The AIA has a payment application form that is standard in the industry. Read the rest of this entry »

With the decision to move forward with this real estate development, we quickly pushed the start of construction. The site was cleared, the septic system installed, foundations placed and framing started. Here’s some photos of the actual construction:

Foundation Wall from the Lake

Aerial Photo of Foundation Walls

Framing Underway

Other than a number of framing issues because of the multiple angles and roof pitches, construction went well through this part of construction. However, construction of your project rarely goes perfect from start to finish. This one was no exception as future posts will prove.

Revised Financial Model

Our last post walked through our revised financial model. In running the numbers, we had a dilemma. The highest priced spec luxury home sold to date on this lake went for $1,700,000. In our latest financial model, we would have over $1.9 million in costs! The model we put together had us selling this development project for $2.3 million (a 35% increase over the highest selling home to date) to make our desired profit numbers. We asked the question, “What would you do?” Build the highest selling luxury spec home to date or start over with significantly lower expectations? Read the rest of this entry »

We must be finally making a name for ourselves. In the last week, we have had close to 1,000 separate pieces of trackback spam! What a pain, but it must mean that we are worth the effort to spam.

In addition, our posts are starting to be selected as the top posts for a number of blog carnivals. Recently we have been listed on the following blogs:

http://www.canigetrichonasalary.com/2008/04/blog-carnival-round-upquiet-after-storm.html

http://www.llamamoney.com/carnival-of-net-worth-1/ 

http://georgiabuyer.com/?p=70

http://daily.hotpads.com/hotpads_daily/2008/03/the-greatsfunny.html

If you haven’t checked out the selections in a blog carnival lately, you are missing the opportunity to read some of the better posts on topic.