From: David H
Sorry for a long post but I would appreciate anyone's thoughts on the scenario below.
I know a builder who has been renovating houses and selling. He has a lot of his funds tied up in projects awaiting development etc so he cannot access much at the moment.
His proposal is that I and my wife provide the finance to buy and renovate a property while he will provide the expertise, designs, manage the project etc. The property will be purchased in our name. He will use subcontractors in certain areas and also work on the project himself. At the completion of the project, after taking into account all costs including finance costs for my mortgage etc, we will split the profits 50/50. Note that without his expertise I would not really know what to do and would be still looking.
The proposed figures are buy at $160k, spend $50k renovations, sell $280+. So all up including costs etc I would think it would cost $220. Renovations will add an extra storey (master bedroom, ensuite and walk in robe), add a study, 3 existing bedrooms become 2, sharing an ensuite and having WIR each, adding a guest room with ensuite, tidying up the kitchen, adding a family room and decking and then a double garage. Sounds a lot but not much structure needs to be altered (so I'm told). Costs will be kept down as he will do a lot of the work himself using is HIA company.
So what do others think of this? I'd be happy to clear $30k on 100% borrowed money. I'm not yet sure if he is expecting a wage out of this (which would be a small retainer and obviously reduce the profits) or if getting 50% of the profits is reasonable.
Getting someone else to do this work sounds similar to Michael Yardney's offer that he is making, except that I would think the turnover will be quicker in this project and I will have more control over the project & be able to learn more by spending time and asking questions. I feel this is important in learning what to do.
Please provide as many comments as you want.
Thanks in advance.
David
Sorry for a long post but I would appreciate anyone's thoughts on the scenario below.
I know a builder who has been renovating houses and selling. He has a lot of his funds tied up in projects awaiting development etc so he cannot access much at the moment.
His proposal is that I and my wife provide the finance to buy and renovate a property while he will provide the expertise, designs, manage the project etc. The property will be purchased in our name. He will use subcontractors in certain areas and also work on the project himself. At the completion of the project, after taking into account all costs including finance costs for my mortgage etc, we will split the profits 50/50. Note that without his expertise I would not really know what to do and would be still looking.
The proposed figures are buy at $160k, spend $50k renovations, sell $280+. So all up including costs etc I would think it would cost $220. Renovations will add an extra storey (master bedroom, ensuite and walk in robe), add a study, 3 existing bedrooms become 2, sharing an ensuite and having WIR each, adding a guest room with ensuite, tidying up the kitchen, adding a family room and decking and then a double garage. Sounds a lot but not much structure needs to be altered (so I'm told). Costs will be kept down as he will do a lot of the work himself using is HIA company.
So what do others think of this? I'd be happy to clear $30k on 100% borrowed money. I'm not yet sure if he is expecting a wage out of this (which would be a small retainer and obviously reduce the profits) or if getting 50% of the profits is reasonable.
Getting someone else to do this work sounds similar to Michael Yardney's offer that he is making, except that I would think the turnover will be quicker in this project and I will have more control over the project & be able to learn more by spending time and asking questions. I feel this is important in learning what to do.
Please provide as many comments as you want.
Thanks in advance.
David
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