[Guest]

My cousin is a Realtor who has recently gotten into the property preservation field. I've done a few board up jobs for her over the last couple years, nothing big and no problems.

I had one whole house remodel request from a bank called PNC that we both laughed off the desk. It was about a $120K job to finish off a house. They accepted my bid but sent me a contract with the worst terms imaginable, basically I had to finance the whole job, myself and subs had to release any right to lien, they could terminate without cause or notice, etc. Needless to say the house is still unfinished, I'm sure they'll find a sucker eventually....

Anyway, she just passed me another request for bid: This one is about a $40k job from a company called Specialized Asset Management LLC. It would require about a 24K outlay in subs and materials.

Here's the question to the group: On larger jobs do these banks still require the contractor to finance the entire job for them? Payment in 30 to 60 days etc. It seems a bit ridiculous to me, but I suppose it wouldn't be a problem for a big company like Balfour.

 

[thanohano44]

Ridiculous is right. On jobs that big, you set your terms.

 

[brm1109]

If I had a large job like that, I would treat it like any other customer and require 25% deposit. And no way will I ever waive the right to lien.

 

[thanohano44]

If I had a large job like that, I would treat it like any other customer and require 25% deposit. And no way will I ever waive the right to lien.

25%? We don't do it until we receive 50% up front.

 

[Guest]

Considering all the red flags on this, Bank Owned, Foreclosure, most likely a bankruptcy in there somewhere, I would shy away from these without a previous positive relationship with the person signing the checks.

I am wondering if it is even a legal clause for someone to ask you to waive your lien rights.

 

[Guest]

On jobs that big I always request 50% down. Most banks will hem and haw but I'm not financing them. As for waiving your rights to lien, I'm in Michigan, and by law a contractor can only waive his rights after the work is done. Even then anyone who worked at that property either as a sub or employee can technically lien a property for non payment. I would imagine its the same in other states too. Even if you signed it , it means nothing.

 

[Guest]

We have done many large jobs but what your post say's would scare me....

1) Realtor doing P&P. (conflicts of interest can cause non-payment)
2) Capital (If you can't afford to lose the money than you can't afford to complete the work is our motto.) This holds very very true in doing large remodels in the foreclosure field
3) You don't know your clients. I would never get into "bed" with any foreclosure service company without knowing them first...even the ones we know very well we are selective on what work and how much we are willing to put into the pot.

We have done many jobs $40-$60k and up to $144k without any problems even though it makes you sweat a bit. We normally go 40% down, 30% at the halfway finish mark and 30% at finish before the final inspections. We will not allow any finals to be done without payment in full.

Good luck

 

[Guest]

Thanks to all. I've read through most of the 'war and peace' threads. The property preservation business seems like one hell of a complicated place, full of land-mines and villains. Kudos to all of you fighting the good fight.

I really wanted to know weather it was even worth my time to bid on the project. I have no interest in financing anyone's project, much less a banks!
Anyway, I've heard back that they are more flexible on payment terms so I'll submit a bid with reasonable payment terms and see what the wind blows back.

 

[Guest]

Thanks to all. I've read through most of the 'war and peace' threads. The property preservation business seems like one hell of a complicated place, full of land-mines and villains. Kudos to all of you fighting the good fight.

I really wanted to know weather it was even worth my time to bid on the project. I have no interest in financing anyone's project, much less a banks!
Anyway, I've heard back that they are more flexible on payment terms so I'll submit a bid with reasonable payment terms and see what the wind blows back.

Most loans like this allow a draw of 45% upfront and a 2nd draw for a specialist you might need to hire such as granite countertops.

My suggestion is bid so you make really good money to make this risk worth your while.

I liked Fremont's advice.