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April 8, 2025 42 mins

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Episode Transcript

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Speaker 1 (00:00):
Welcome to the Professionist Real Estate
Investing Podcast.
I'm with my guy, rocky.
How you doing, rocky?
I'm doing good man, thanks forhaving me again.
No problem, I had to have youcome on this one because after
we talk about this one, which isthe seven big mistakes to avoid
in new construction, I have agreat story that goes hand in
hand with this, because you'regoing to be everybody's going to

(00:22):
be out there amazed like whatexactly was this person thinking
when building something?
But we'll get into this one theseven big mistakes to avoid in
construction.
And so the first one is don'tskip the inspection.
Do not skip the inspectionthat's the number one thing
because you don't want to knowyou.

(00:43):
You want to know everythingthat's going on with the place,
I mean from from the foundationto a little um teaser out there.
If you build something you addon another floor, make sure you
get a hold of an engineer.
Why you need to get hold ofengineer?
Because you're gonna make surethat second story stays in place
.

Speaker 2 (01:02):
Yeah, for sure.
My neighbors, they're talkingabout putting a suite above
their garage and they had acontractor friend.
Oh yeah, we can do it.
We got to upgrade this and thisand we can do it.
We got to rip the roof off andstuff and they're talking about
doing that and she's like well,he's like first of all, you

(01:25):
should get an engineer.
You should get, like you knowsomeone that knows the structure
and everything that.
We have somebody like that.
So they brought him in and thedude looked at them.
They're like we can do it forsure.
He's like, but we had to ripyour entire roof off, we had to
rip the entire garage out.
And she's like why the entiregarage out?
And she's like why?
She's like the foundationitself is not supported, has a

(01:47):
support system for a two-story,and I was like, oh my God, I
didn't even think about that.
So they say, yeah, we can do it.
He basically said we can doanything, we can build you
anything, but you got the moneyand the time we can do it.
Oh wow, he said you, you gottarip the whole damn half of the
house off to get the garage outright, which the garage is

(02:07):
inside the house, yeah, and thenyou build up from there.
I was like, of course you canbuild an extra house if you have
the money.
That's crazy.
You can put a pool on top ofyour roof if you wanted to, but
you won't pay.
You won't pay for it.
I was like I didn't even thinkabout that, because I was like,
oh, yeah, because I told him,like you can put an extra roof

(02:28):
above your garage, yeah, anextra room.
And I was like, oh, that's agood idea because the room's
there.
But he's like inspected yourconcrete, inspected, make sure
they have the rebar in the rightspot, and then your framing has
to be, you know, the properframing, with extra support

(02:49):
beams and stuff like that.
I was like, oh my God.

Speaker 1 (02:50):
Yeah, and you're right about the soil too,
because if the soil is wrong,there's going to be a lot of
things going wrong or not goingto happen, or it's going to cost
a lot of money.
Yeah, yeah, yeah.
It says builders can missthings plumbing connections,
electrical wiring, hvac issues,you name it.
It says always hire a thirdparty inspector before closing.

(03:12):
It might cost a few hundreddollars, but it could save you
thousands in the long run, whichis true.

Speaker 2 (03:16):
If you can't.

Speaker 1 (03:17):
If you have the ability, I would hire somebody
to go over everything to makesure everything is good.

Speaker 2 (03:23):
Yeah, I know people skip it because it's just money.
Like, oh yeah, let's check theelectrical, let's see how many
extra $600 to $800 for some guyto come out, and then whoever
did your electrical is likethat's good, that's good.
Like you know, you got to checkit out.

Speaker 1 (03:38):
And then you know a lot of us too, me too, like you
go by looks it, looks good, itlooks like it should be okay.
Yeah, but you don't really knowbehind the scenes how it is or
how it's going to operate yeah,like you said, it looks good.

Speaker 2 (03:52):
But it looks good because you don't know what
you're talking about.
If I do what I was talkingabout, I'll do myself exactly
right.

Speaker 1 (03:58):
I wouldn't know, I don't know.
Like number two, assume thebuilder has your back.
It says friendly sales rep.
Sales rep in your model, yourmodel home.
They work to for the builder,not you, oh yeah yeah so when
people build homes, they haveblueprints of how to go about
houses and like you were just wewere talking just before like

(04:21):
the material that's used.
Yeah, how cheaply made.
Like that's the material thatthey're using to build homes.

Speaker 2 (04:27):
There's quality and material, like everything.
Everything has a level to itexactly, yeah, they're.

Speaker 1 (04:34):
All they're thinking of is the, the quantity over the
quality you know what?

Speaker 2 (04:39):
that's funny.
My uncle's gonna build a fenceand we built fences before
together and I told him, hey,make sure you get that number
two fence.
And he's like what Like?
We're both like, kind of likeoh, what does that mean?
Again, and apparently just thefence boards with the dog ears.
There's qualias of fence and ithas like a number one, two and

(05:00):
three and those are the like.
Three is like the best one, likeindustrial fences that just
made out of wood.
It's just the quality is muchthicker, they're just much
thicker, right, and it's notcedar or something like that,
it's much stronger wood versuslike these big companies that

(05:20):
all come into the like Lowe's orHome Depot and these boards are
super thin, super thin.
They boards are super thin,super thin.
They're cut, super thin.
They're literally flimsy andthey're all warped because
they're so flimsy.
It's like these are brand newcuts from from the home depot
floor.
Like imagine, imagine you putthat in the sun for a season or
two oh, and that thing's gonnawarp split and then you replace

(05:40):
those in like three or fouryears versus like a high quality
wood.
But the home depot one was likeI think at the time was like 100
, like a dollar 98 per per fenceboard and the ones I bought at
the time a number two whateverthat means in the construction
world was like three, threedollars and 90 cents.
So it was like dang near double, more than double the price.
But man, when I put thoseboards next to each other I'm

(06:01):
like, oh my gosh.
The quality of it.
What quality changed?
Can't change it with.

Speaker 1 (06:08):
Oh, yeah, so that makes sense.
Because the grade of the boardsBecause, yeah, you got your
thin ones it's just even likeeverything I view it like, even
because I love shoes.
If you buy a cheap pair ofshoes, you know good quality
pair of shoes compared tosomething that you're going to
wear for a week and a breakapart, yeah, and we rip it on

(06:31):
the seams Right.
Exactly, yes, is that always?
Bring your own real estateagent or advisor represents your
interest, someone who cannegotiate, read contracts and
ask you, ask the right questions.
You want to make sure you don'twant to.
You don't want no one to take,no one wants to take it be a tan
taking advantage of in anywhereaspect.
You just want to make sure thatthe builder is doing his job,

(06:54):
yeah, and making sure everythingis done accordingly the right
way.
Yeah, number three don't ignorethe fine print in the contract,
and that's good, especially ifyou're dealing with the realtor,
because realtors, they dealwith contracts all the time.
You want to make sure thateverything in the contract is
what it is and what it standsfor, because you're not, you're

(07:17):
not trying to be thrown offguard by like, hey, you're
supposed to do that.
Well, it's not in writing.
Yes, it is in writing.
You need to do that.

Speaker 2 (07:24):
Yeah, and when I bought my AC unit I went to
three different companies.
They're all high-qualitycompanies with good reviews, but
don't get confused.
I went with probably, if I saythe company's name, it'll be
like oh yeah, I went with thetop, top oflo ac unit companies

(07:45):
in this area and they, theirfine print was like if it, if it
breaks down you know, within,like, uh, I think if it breaks
down within like six months, sowe'll replace it, but I think
after that that's it, we won't.
I was like, oh, that's okay andjust, and then just, um, uh, if

(08:06):
you have any issues, you knowyou call this number and call
this number and then they'll getto us and we'll schedule in.
It's like, oh, that's that's forsuch a big company.
It's like, oh, that's that'susually.
You want to like a directcontact and we'll take care of
you.
We'll do our best.
Customer service is like alwaystop notch.
It was a big company name.

(08:26):
I was like, dude, this companykind of blows.
And I went with the second bestcompany that was in the area
and they're like look, ifsomething happens, we're going
to take care of you.
Usually we say any between ayear.
If it breaks down, we'llreplace it, no questions asked.

Speaker 1 (08:44):
I was like oh wow, that's great.

Speaker 2 (08:45):
Other companies are like you know, they'll send
someone out and they'll look atit.
They're like, no, well, if itbreaks down, we'll come and
we'll just switch it out.
And then just I was like, oh,that's cool, I wouldn't have
been known to even think aboutthat.
And then their quality ofcustomer service like here's our
numbers.
He's like, he's like, this iswhat we do.

(09:07):
We'll give out our personallike work phone number and see
what happens.
You can call me.
And I was just.
It was so way more direct andit was like such a much nicer
experience and it wasn't thebest of the best company on
Google or whatever.
You know, I was like dude yeah,yeah, it might say it's the best
company in the area, but untilyou like, talk to them, read the
fine print and see what they'reoffering versus like other

(09:29):
people.
It's like dude.
I don't know where they gotthose five stars from Exactly, I
tell people especially withthat.

Speaker 1 (09:37):
I tell people do your own due diligence, investigate
your own stuff.
I don't go by Google reviewsall the time because I mean
anybody can put anything likefive stars or be hateful.
Talk to people who's like, hey,have you had an experience with
this with your house, like howwere they Great feedback.
I mean word of mouth is thebest thing.

Speaker 2 (09:57):
Oh, it's huge.
I love word of mouth.
Once I got my solar installedin my house, after it was
installed and it looked all niceand everything like, all of a
sudden it was like hey, hey, Iseen that company come over.
How, how were they?
I'm like, dude, they're great.
Actually I don't know aboutanyone else, but this
salesperson right here got hiscar, he's great.
I was like give him a call.

(10:20):
I get a little discount if youget that Exactly right.

Speaker 1 (10:23):
I do that referral fee.
But yeah, so yeah, make sureyou do your due diligence and
you study.
If anything breaks down in yourhouse, don't always go by
Google.
I would just ask people whoowns a house like, hey, part of
this has like your AC unit, hasit broke down Like who did you
go with?

Speaker 2 (10:42):
Exactly.

Speaker 1 (10:43):
How were they with you?
Who was the person that youtalked to?

Speaker 2 (10:47):
maybe I need to get in touch with them because I
have a problem with my ac unityep, yep, and some and some
places uh, offer a lot more ofincentive, like maybe just a
little bit lower interest rateor maybe just a little bit more
on the warranty.
You know, instead of like 20,20 year warranty, they give like
21.
It's like, why not?
Why not go with the guys?

(11:07):
The same exact thing, sameprice, everything, but the
warranty is a little better.
It's like, yeah, and then you,you know, then the other
companies were like oh so why?
I see that you didn't go withthis.
Can you, can we ask you why youdidn't go with this?
I'm like because they gave me aone more year warranty exactly
right, is it?

Speaker 1 (11:22):
oh, okay, and that speaks volumes.
Right there, and they were nice.
Yeah, and all right.
The next one, number four don'tover customize.
So this one has to do with youknow, if you, if this is going
to be your forever home, do doas you must like, go all out.
But if it's not, and you knowyou're going to sell in the next

(11:43):
five to 10 years, don't overover customize.
So I tell people, when I showthem homes, I'm like, yeah,
we're going to show you thishouse.
And they, like, I don't likethe way this is, I don't like
the way this looks.
And then you have people whothat that's their house.
They, they fix everything up.
And I'm like, and I tell people, like, when a person's on the
selling side and they geteverything all situated in the

(12:06):
house, um, to their liking, theperson who's going to buy the
house they're not reallyconcerned about that.
They're in their mind all right, I'm gonna buy this house.
This is what I'm gonna do,because everybody's taste is not
the same.
Yeah, so they're going by like,okay, I would do change this, I
would change this when the otherperson who's selling the house
is like well, why don't theylike the way it is?

(12:27):
It's great yeah it is, buteverybody's perception and
viewpoints is completely yeahthey.

Speaker 2 (12:32):
I watched the.
I watched a video of, like,what is the most popular color
for house right now?
Uh, the interior is like that.
It's a light gray.
It's super neutral everyone.
It doesn't hurt the eyes whenyou're looking at like a bright
yellow or neon.
It's not super dark, it's superneutral.
It makes the house look clean.
You know.
It hides any blemishes becauseof the, the slight gray.

(12:55):
It works with the shadows andstuff and I was like, and you
know what?
It's super easy to paint over.
It's not like white.
If you have a white paint you'regonna have something get hit a
times because white might bleedthrough.
Or you're going from black towhite.
You know it's gonna bleedthrough, um, but gray it's like
it's an easy, cheap paint colorthat you can get.
Uh, I was like, oh, that makesso much sense.

(13:17):
Like every single house.
If I get a room, probably it'sgonna be like gray gray.
I was like because they want to, they want they sell it or I
sell it.
They want to repaint it,they'll repaint it but, like you
said, as long as it looks clean, it feels clean.
They're like that's what theycare about.
It's like oh, I love this lightgray and it's like no, it feels
it's a clean house.

Speaker 1 (13:35):
I don't mind, not like the color, but it's clean
house exactly because thatperson that's buying, like I
said, they're feeling like I'mgonna this house, this is what I
would change because that'sgoing to be their house.
But if it's going to be aforever home, oh, you can go
ahead and modify and do as youplease.
But if you're knowing thatyou're going to buy this house
and you're only going to have itfive or 10 years, don't

(13:55):
over-customize.
That brings me.
I was just thinking aboutsomething about that too.
So it just sold, I believe lastyear If it wasn't last year, it
was the beginning of this year.
It was the Michael Jordan home.
So, it was on the market for 10plus years I can't remember the
exact years, but MJ thought itprobably was going to be his

(14:18):
forever home, so everything wascustomized to him.
Number 23.

Speaker 2 (14:23):
Everything the Jordan symbol.

Speaker 1 (14:25):
Everything 23.
Everything and the reason whyit couldn't sell?
Because it was over-customizedto his liking, because that's
the way he built the structure.
But it eventually sold after 10plus years.
Some enthusiasts were like yeah, like they were probably
thinking like, how can I changethis for my liking?
Yes everything was personalizedfor his yeah, yes, that's true,

(14:47):
I was thinking about that I waslike, yeah, it was, uh, it was.
It took a long time for thehouse up because it was
customized for him you know?

Speaker 2 (14:54):
you know that's funny , you said because, uh, some
friends and people talk to youthat try to sell the house or or
rent and stuff like that.
They're like you know what's abig killer Ponds?
You know how people dowaterfalls?
I think we have it here likewaterfalls and ponds for koi
fish stuff.
It looks nice, but man, theupkeep, the maintenance on it
the location of them are usuallyin the corner or something like

(15:16):
that.
It's always an eyesore if youdon't take care of it.
And, like a lot of times, whenI was looking at houses like 80
plus houses and I saw littleponds, the first thing that
popped in my head was like I'mgoing to take that out.
Maintenance, maintenance, I'mgoing to take it.
No, I'll say I'm going to takeit out, I'm going to rip it out

(15:36):
or like it.

Speaker 1 (15:37):
Yeah, no, A lot of people don't like it.
And the maintenance?
I don't even know what themaintenance price of those bad
boys are.
Yeah, all right, the next one,number five.
Don't forget to do yourresearch of the builder.
It says check reviews of theBBB ratings and talk to current
homeowners in the community Huge, huge.
I mean nothing wrong againstGoogle, the five-star, the

(16:00):
four-stars, people's reviews,but the word of mouth and what
people around have dealt withthe builders is a great way to
navigate if you're going to usethem or not or who to go to.

Speaker 2 (16:13):
Yeah, this is asking your neighbors.
I was watching I think three ofour four of our neighbors in
our area did their roofs and allof them went with different
companies.
Yeah, all of them went withdifferent companies.
Well, I technically wentbecause my company that did my
solar they're a roofing companyand they do roofs all the time

(16:33):
and I never saw them on thestreet, on my street, and I saw
like the other companies come inI was like oh, that's strange.
Usually you see one company.
They take over the whole areabecause everyone knows everyone.
But who knows, somebody got adeal or something.

Speaker 1 (16:48):
Yeah, that's true, very true.
It says number six don'toverlook the warranty.
It says most builders offer aone-year workmanship warranty
and maybe a 10-year structurewarranty.
It just varies.
Get clarity what happens if youhave a, you know, if your HVAC
fails in two years, if your HVACfails in a year or two?

Speaker 2 (17:11):
you got serious problem.
Yeah, cause those things aresupposed to last 20 plus years.

Speaker 1 (17:15):
Yes, or you have a roof leaks.
It's just, you just want tomake sure, like, like I, I'm a
big person of warranties.
Oh yeah, I'm a huge fan ofwarranties, because unforeseen
occurrences can happen anytime.
If I can get a warranty onsomething, shoot I'm getting it.

Speaker 2 (17:30):
Yeah, especially if it's going to be like your
running property or somethinglike that.
Like if you live there andyou're and you're a roofer,
that's what you do for a living.
You're probably gonna worryabout the warranty on the roof
you roof, you're like I couldprobably fix that cheaper or
whatever.
But like if, like you said, abrand new build but they're not
going to cover a roof for morethan a year or two, it's like
man, do you?

(17:50):
My whole thing was like do youstand by your work?
Because if you stand by yourwork, a lot of people say we
stand by our work.
Lifetime warranty what is it?
Snap on?
they're like lifetime yeah, thatthing for 25 years Snap that
wrench, go back, get them brandnew.
I was like, hey, I rememberthis one lady she bought.

Speaker 1 (18:07):
What did she buy?
She bought.
She had a car and she alwayshad.
She didn't have to buy manyparts for a car, but every part
had a lifetime warranty, so whenthat part went down she always
had a receipt and got to replace.
Oh, yeah, yeah, so she didn'thave to hardly spend anything.

Speaker 2 (18:27):
Yeah, after 20 years you know brand new, brand new
used uh car because of warranty.

Speaker 1 (18:32):
Yes, yeah, so uh.
And number seven don'tautomatically use a builder's
lender.
It said builders said buildersoften offer incentives to use
preferred lenders, you know getclosing costs, upgrades et
cetera, but those deals may comewith a higher interest rate or

(18:53):
junk fees, yeah, so don't alwaysdo your due diligence and shop
around?
Yep, definitely shop around.

Speaker 2 (19:00):
Definitely shop around.
I didn't think about that toowhen I did my AC unit, because
it was so convenient.
They made it so convenient oh,we'll just put your name in and
then we'll run your credit andsee if you can approve for it
through our people.
I'm like, okay, that's fine,because we literally did
everything on our coffee tableor dining room table.
We just did everything.

(19:20):
Then we got approved and boom,boom, things were set and I was
like man, I could have easilywent to my bank that I've been
banking with for over 20something years and get probably
the same loan, but maybe evencheaper because I've been
banking with them for so long,you know, with a better interest
rate, better payment plans andstuff like that, and that credit

(19:43):
will roll into what I'm doingwith my personal stuff or my
business stuff.
So, man, I could have done that.
But sometimes they make it soconvenient that it's like I'll
just go with you.

Speaker 1 (19:53):
Yeah, it's convenient because it's right there.
Yeah, yeah.
So that's the seven mistakesthat you need to avoid in new
construction.
First one don't skipinspections.
Number two don't rely on thebuilder's rep.
Three don't ignore the contract.
Four don't over customize.

(20:15):
Five don't forget to do yourresearch of the builder.
Six don't overlook the warranty.
And seven don't assume thebuilder.
Your research of the builder.
Six don't overlook the warranty.
And seven don't assume thebuilder's lender is the best
deal.
So let me get into my wonderfulstory, because that's why I was
kind of moving on with this onebecause of it.

(20:37):
So I have a client and theclient got a hold of me to help
with him with selling a house.
He found how he got a hold ofme is because one of his friends
I helped sell his house so wentout there and I checked out the
house and everything and it'sout in the country.
You go through the driveway,through the fence and you see it

(21:00):
.
You come up to the house.
You're like oh, OK, this is kindof you know, through the
driveway, through the fence, andyou see it, you come up to the
house.
You're like, oh okay, this iskind of you know, kind of
interesting.
So you look and you could tellthat it was not completely done
because in the second story,like you had french doors where
there should be a balcony.
So I go in there, I look andeverything and look all the the
electric had been done, thewiring done, the the tankless

(21:21):
was it the tankless hot waterheater?
Yeah, the wiring, all that wasdone, everything the cabinets
and everything still in theplastic and just basically ran
out of money.
So I went and I was like, allright, we'll put it on the list
and everything.
They showed me where the septicwas at and it was actually a
place where it was a cultivationof cannabis.
That's where the septic was at.
And, um, it was actually aplace where, uh, it was a

(21:43):
cultivation of cannabis, that'swhere they used to grow at, but
that's there, no more.
Yeah, so put it on the list andgranted, everybody's hitting me
up like no other.
like I'm telling you like about4,000 people have seen the
pictures and everything on onthe the um on the internet, yeah
, and I'm getting phone callsfrom the realtors all the time

(22:04):
about this property and then arealtor hit me up and says oh, I
just found out.
Um, I didn't know this, but thehouse is kind of red tag and
I'm like, oh, red tag, like Ididn't know anything about this.
So I went and I did my own duediligence because the
communication wasn't the best.

(22:25):
I always have greatcommunication with my clients
but some reason or another likethe communication part of
telling me this wasn't told tome.
So I went to the permit placefor the county and they were
like yeah, you have, it was onewas a nuisance.
But I found out why it was anuisance, because on the other
side, the other side of the road, uh, somebody else was growing

(22:48):
cannabis, so it was acompetition battle at that time.

Speaker 2 (22:50):
So that was years.

Speaker 1 (22:51):
That was years down the way.
And then after that it was uh,unpermitted septic tank, oh yeah
, uh, unpermitted septic tank,oh yeah.
And after that was a uh I'mpretty septic tank.
It was, um, it was supposed tobe.
This is what it's supposed tobe.

(23:12):
It was supposed to be adetachable garage on the
property Okay, cause back in theday there used to be a mobile
home on the property, okay.
So I'm doing my due diligenceand I'm like interesting, and
the lady's telling me and she'sgiving me the paperwork, this
and that and everything, and Italked to him about it and
everything.
And then I sit back and I'mlike I wonder if there's a mount

(23:35):
on these red flags, thesecitations, which there isn't
amount.
Yeah, was, there was a wasthere a amount attached to them.
Yeah, which it hasn't, becauseit hasn't gone to the court
system yet.
Okay, so I'm doing, I'm doingall my work and everything I'm

(23:55):
like.
This is crazy.
So this house, two-story house,was built without no permit.
No, nothing, no, nothing.
Make it even better there's noblueprint to this house.
Oh, that's so risky, so theindividual is going only by
spite of like on his head in hishead how to go about building

(24:18):
the house.

Speaker 2 (24:19):
Oh my gosh, oh, that makes it so risky and I'm like
okay.

Speaker 1 (24:29):
So then I was like you know what?
I need to go back up thereagain to the permit place, so I
go up there.
It was, and this is the likeI've gone up.
This is my third time going uphere and there's actually people
in there, because the past twotimes there was no one in there
and I was like in and out Forthe same property.

Speaker 2 (24:45):
For the same property .

Speaker 1 (24:46):
Okay, so I go in there and I'm talking and the
gentleman's talking to me andhe's like, yeah, he's like so,
it was a mobile home on thisproperty.
I'm like, yeah, and he, uh,he's like, uh, so how I wonder
how they're getting the water.
I said there's a spring, butwe're, we're about, we're about

(25:09):
to we're about to deal with allthe fees in a second.
This is going to be this isgoing to be about $20,000 to
build a well for the spring forthe current flow of the water to
come through the house.

(25:31):
And then he's like well, it's anunpermitted house.
It says well, another problemyou have here is that he built
it without a permit.
Like you were saying earlier,there's a second floor, so he's
gonna need to bring engineer outto make sure that this floor is
stable and for it to be walkedupon.
Yeah, and for anyone who sleepsupstairs, you know, can sleep

(25:54):
up there instead of crashing allthe way down to the first floor
yeah, yeah.
And I'm like, oh my god, sohere's the money coming up now.
I was like all right.
And he's like, yeah, so thewell's 20 000, right, uh-huh.
And then we got like so.
And then who's using this wateris another key issue, because
we don't know who else is usingthat water.
The easement plan for that, ohyeah.

(26:18):
And then this is the crazy partabout this is the one that got
me is the engineering one got meand then the septic got me.
So around where it's at theproperty is at, is this
unpermitted septic.
And usually he said 90% of thetime septics who are put in this
, put in without a permit,they're going to fail 90% of the

(26:41):
time.
Oh, wow, and so.

Speaker 2 (26:44):
He tell you why.

Speaker 1 (26:46):
No, he didn't tell me why, but I think I know, I
think maybe this percentagemight be why.
So he said that where it's at,because it's just clay dirt.
Yeah, he said the reason why isbecause in 2018, they changed a
lot of modifications and stuffand things for the soil and
everything when it comes toseptic in 2018.

(27:09):
So if he does, if everythingworks out and he needs a regular
septic, it's going to goanywhere these 15, 20,000, the
leach and everything.
Right, he said.
But if it doesn't work out andthe soil doesn't work out,
there's another one.
That other septic is 50 to$60,000.

Speaker 2 (27:31):
Golly.

Speaker 1 (27:33):
Yeah.
And I'm looking at him likethis, like are you serious?

Speaker 2 (27:38):
It's like cha-ching cha-ching, cha-ching cha-ching.

Speaker 1 (27:41):
And then let me grab this piece of paper real quick.
Then he's like, oh, and I tooka, you know, I did a scan, I
scanned the piece of paper andeverything.
And he's like, do you knowabout this?
And I was like, well shoot, no,I don't.
I said maybe all realtors needto know about this, especially
this part, because I like, Ilike to stay educated on

(28:03):
everything as best I can.
He said, yeah, the, the, the,the, the county, um, the county,
education and I was like whatthe county education?
Yeah, the county education isdeveloping fee.
It's a developer fee collection.
So, for any proposedresidential rate at $5 and 17

(28:26):
cents, okay, you have to paythat.
Also, when you build a newhouse, okay, it goes in a
separate bank.
Okay, so that's over another anexpense of over almost $7,500.
Oh, wow, that you have to payfor.
Yeah, it's a proposedresidential rate to develop a
house, oh, okay, okay, so that'sanother expense, wow.

(28:48):
So I'm like so we have a housethat's unpermitted, septic
definitely not permitted.
We have these acres.
We might as well just sell itfor the acres, because there's
no way you can sell this house,because we don't even know if,

(29:09):
uh, a person's gonna be able tostay upstairs yeah, it's, it's a
, it's a ghost house, the housenot even there on paper.
It's not even there.
No, yeah, you're right, the,the, the fees and permits and
everything my god, dude, the uh,the uh.

Speaker 2 (29:27):
I think I think I had a friend, uh dad, that did uh
new constructions or he he likerevamped houses and stuff and uh
, he had, he did.
So he had some guy do theelectrical and he has.
He's supposed to get itinspected but the drywall guy
came in the next day and did thewhole drywall.
The the electric guy's likedude, gotta rip all that out all

(29:47):
that, out All of it out.
I can't see none of this stuff.

Speaker 1 (29:49):
We got to rip it all out.

Speaker 2 (29:50):
No, he's like maybe this area, maybe we can just cut
this area and I can see thisarea, but he's like this area
down here downstairs we got torip it all out.
I can't, I don't see with thefuse box and stuff there and
that the houses you said brandnew, this and that and cabinets
on the floor.
Still, all that stuff must getripped out.

(30:11):
Looked at plumbing I meanthere's no plumbers gonna be
like yeah, it looks good.
No, they didn't rip it out.
Make sure, you know.
And granted, like it looks like.

Speaker 1 (30:20):
So basically there's no door on the on where the
electric box is.
You see all the wiring.
You see all the wiring for thetankless um hot water, hot water
heater, but through the walls,they got to check everything.

Speaker 2 (30:32):
All that drywall has to come out.
They want to know where it leadsto and to make sure it's it's
done at this, it's not splicedand crazy in some areas and
stuff like that Exactly.
I was like, oh dude, that'sgoing to be, that's a lot of
money.
A lot of times, luckily, theywere able to like screw the draw
out because it wasn't payingyet.
But he was pissed.
He was like dude, I told youdon't draw out yet or whatever,

(30:54):
but let's just go.
Guy was cool, he was like I'llcall him back tomorrow but yeah,
he's like this whole thingwould need to come out.
I'm not gonna pass something.
I can't see.

Speaker 1 (31:03):
I was like, oh, dude no, this guy right here, because
he'll be liable.

Speaker 2 (31:08):
Yeah, it burns down.
It's just like oh yeah, Iexpected his name's on it, but
yeah, imagine this guy trying tosell his house.
No, I'll do the whole.

Speaker 1 (31:18):
That's crazy now and the crazy part of this is I
might have somebody who wants tobuy the house and the thing is
he said that he can fixeverything on his own and
everything, and his problem isif he sells it.
I said if you sell it, you'regoing to have to sell it for
cash.
Yeah, and he's like could it besold?

(31:40):
I said, yes, it can be sold,but I will tell you this.
I'm going to discloseeverything that I know.

Speaker 2 (31:50):
And if they ever have to pull permits or whatever and
get the house inspected forsomething, I mean there's no one
that's going to warranty thehouse Never.
They're like how are we goingto insure the house?
Never, they're going to havesomeone appraise it right or
whatever, and stuff they'regoing to look it over.
And if you don't get thatappraisal, they're going to look
it over.
And if you don't get thatappraisal, they're going to be
like, and they appraise it Likeyo.
That house is worth nothingbecause we don't like.

Speaker 1 (32:11):
this is crooked, this is that or whatever it is, oh
man.

Speaker 2 (32:15):
Yeah, there are all inspections that the banks
always do to look at houses.
Like you said, you have to sellit cash because no one's going
to loan you a house.
That's not permitted no.
And don't be alone in yourhouse.
That's not permitted, no.
And if you, even if you do buyit I mean like we talked about,
I think like number one- youdon't skip the inspections.

Speaker 1 (32:35):
Yeah, until permits.
It's so true, because right nowit's at a rate where the part I
can't get out of it there's noblueprint.
Every house does every.
Every house has to have ablueprint.
Yeah, I mean, that's how Ialways tell people.
All right, let me see what'sthe blueprint of the house.

Speaker 2 (32:55):
How's it structured?

Speaker 1 (32:56):
Yeah, I'm not going by sight.

Speaker 2 (32:58):
Yeah, I feel it.
So the guy sold it, the guythat you're selling, he's the
one that built it.

Speaker 1 (33:05):
Yes, hmm, yes, and there's actually a guy who is
thinking about selling it.
I mean selling, buying it.
But I told him I'm gonnadisclose everything underneath
the sun to let him know what'sgoing on.
Yeah I said and I said, and Isaid he said can it be done?
I said, yes, it can be done,but I'm disclosing everything.
Yeah, so you don't come back onanyone like you know what you

(33:27):
bought, you know what you.
You know what you bought.

Speaker 2 (33:30):
You know what you bought?
As is baby, as they say on theparking lot.
As is, as is.

Speaker 1 (33:33):
Yeah, you take it off , Sorry if it breaks down in an
hour.
That was on you.
You knew what it was.

Speaker 2 (33:39):
Oh man, that's crazy.
Yeah, no permit, I mean thefoundation, who knows?
Because even the foundation isthe first.
Well, the first permit is tosee if you can even build it on
there, yes, and then the soiland all that stuff.
Get that checked out.
But once you pour that concrete, that foundation, it's like all
right.
Yeah.

Speaker 1 (34:01):
You start building, but who knows?
Yeah, so we'll see.
I'll have to keep you tabs onthis story.

Speaker 2 (34:06):
Oh man, let's see.

Speaker 1 (34:07):
Let's see if you get sold and how much, and yeah, I
mean I, just a month ago I soldmy friends his uh, he had
property and I mean he had a.
You know everybody says aboutwith real estate.
You know they think it'sglamorous.
No, there's some ugly stuff too.
I, um, I basically helped himwith the paperwork to to sell um

(34:30):
, his, the property that was inhis name and like the property,
the house that was on theproperty, I'm pretty sure me and
you, if we push the house itwould actually fall down it.
And it didn't have a foundation.
It had no, no concrete slab,which is crazy man.
But yeah, anything can be.
Real estate is not.
It's not there's.
It's glamorous, but there'ssome not so glamorous stuff that

(34:53):
gets talked about with realestate.
Yeah Well, you heard, you heardthe saying of slumlords oh yeah
, yeah, you know buying theselittle rundown places.

Speaker 2 (35:02):
You know what you buy , the quality that you buy, the
home you live in, the rentalproperties you live in, or you
want to get and get going.
You know it really tells youlike what, what, what level
you're willing to go in Exactly.
Like oh, man, I got, I havethese four or five rental
properties.
I'm you know all this, I'mtrying to get a new rent in
there, all this stuff, and man,he's like he's doing it.

(35:23):
That guy's doing it, man likehe keeps telling me he has
rental properties and all thatstuff.
Then the more I dug into it Iwas like well, how much you're
renting these places out?
He's like anywhere from like700 bucks to a thousand, seven
hundred thousand.
How like how big oh yeah, howbig are these?
We're probably like onebedrooms or two bedrooms or
whatever.
I'm like, okay, um, and then hetells me the area.
I was like the one behind therail tracks, those places, those

(35:48):
are your rent properties.
I was like, oh man, no wonderyou keep complaining about
getting new renters and stufflike that, because they come in
for a month or two, they thrashit and they're out.
I was like, oh dude, that'swhen.
I was like I'm not going to bethat, I've got to help my game a
little bit.

Speaker 1 (36:04):
You've got to view it as an investment.
You take care of the propertyand then the people who come in,
who rent, they take care of theproperty.
You want good renters, yeah,you don't want them to leave.
You want them to pay thatmortgage down.
Yep, yep, yeah.
So, wow, yes, I had to give youthat little story because that
story is like.
It's like I was just like,especially yesterday, I was like

(36:27):
I can't believe this.
And then, whatever you do, I'llsay this too If someone says
that you're going to,something's going to be taken
off or anything, make sure youhave that in writing, because
hearsay does not mean anything.
You got to have that, you got tohave a pen to that piece of
paper.
Say like and let it be knownlike no, this cause I've dealt

(36:49):
with a lot of that too.
Like, well, they told me thisand they told me that.
I'm like who told you?
Oh, up there.
And I'm like who'd you talk to?
And like did they writeanything down?
No, I'm like then there's awhole bunch of hot.

(37:10):
Legally, it's like whatever,like that, like that house,
legally, the house ain't eventhere.
Yeah, it's not there, like thegentleman said from the county
is they?
He's this, he's like I don'tknow what to be done.
Needs to be done.
Like you said, it's not there,but you might need to tear it
down.
Even then, you're still takingthe l yep, yep, yep like.

Speaker 2 (37:25):
Yep Like yeah, yeah, yeah.
You know what I think?
I saw a video that some guybought these houses that weren't
permitted, but his plan was I'mgoing to buy the lot.
The lot is the money, the dirtthese houses don't mean crap.
He ripped these three.
It was like was it ADUs?

(37:46):
Yeah, it's like three ADUs inone little property, but it was
split in three different parcels.
He's like, yeah, the ADUs arehorrible, they're not permitted.
It was basically a shacksomeone built.
He's like he ripped them alldown, built three new ADUs in
the area and permitted all that.
He's like, yeah, the guy wantedto sell the property in the
house.

(38:06):
The house is on there, but he'slike no, he's like, like you
said, no permits none of that,so he was able to get it for
super.
basically bought the dirt andthen he ripped everything out
after a couple months orwhatever he built three months
and he was able to likequadruple his his investment.
I was like dude.
If you have a plan like that,all right.
If you.

Speaker 1 (38:26):
If you have the the capital, that that'd be the best
way, because when you startedfrom the ground up, you know
exactly how your property isbeing built.
Yep you know, exactly what'sgoing on.
And then, when it's built, themaintenance like we was talking
about earlier.
You ain't worrying aboutmaintenance for a long time
Because it's brand new.

Speaker 2 (38:45):
Yeah, if you have good tenants that like to cut
the grass, like to fish, youknow, switch light bulbs out and
do all the little maintenance.
You'll never have to hear fromthem.
That's how I was.
I was that renter.
I was just like man, the waterhere is not Oregon.
I'm going to really light thepile, light all the pile lights
out.
I'm just going to home.

(39:06):
You'll get a new pilot light.
Just switch it out and then,like it was like.
A couple months later I waslike, oh, yeah, by the way, I
told my, my landlord.
I was like oh, by the way, likelast month they went out, I
just fixed it.
She's like you did.
I was like I was like, yeah, Ijust, it's easy, you know, I
just fixed it.
She's like, oh, you should have.
You should tell me I would havecalled you know a guy come out I
was like man, that would havebeen like a $200 call just to

(39:26):
get them out there.
You can give me the $200.

Speaker 1 (39:28):
Yeah, right, deduct that off my rent.

Speaker 2 (39:30):
Yeah, she's like oh, you're the best.
Hopefully I did it right.
It was only a couple of screws.

Speaker 1 (39:37):
Exactly, I'm living All right world.
That's another episode of theProfessionalist Investing
Podcast.
My guy Rocky Yep, Everybodyhave a blessed day.
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