How To Start A Real Estate Investment Group

By: M. Scavuzzo

While easier than most think, investing in real estate can be very profitable if done correctly. Unfortunately, most individuals lack the capital necessary to make a significant investment on their own and can be daunting for someone who knows little about real estate investment. Just as there are investment clubs for equities, there are also investment groups for those who want to build and invest in real estate. The purpose of these groups is to get a number of investors together who can pool their resources and knowledge to invest in real estate. I always recommend that in any group an Architect and General Contractor be part of the group at the very least. This is where most of the planning is done and where the best ideas flow from.

Instructions:

Step 1       The internet is a good place to research and learn about real estate investment groups. However, most groups online ultimately want you to join and may not provide enough information until after a commitment is made. And, while most of these are legitimate you should research them before you make any type of commitment. Attending meetings for these groups is a good way to get a feel on how they operate. It’s also helpful to have some first-hand knowledge about real estate and building before opting to start your own. This is why having proven knowledge in the group is essential.

Step 2      Be familiar with the relevant laws of your state before starting a real estate investment club. You and your group will need to know how real estate transactions are handled so you won’t lose money on your deals. It’s always helpful to find at least one member who understands these laws. In fact, members who have specialized knowledge such as accounting, law, finance and real estate can be beneficial for the group.

Step 3      Many real estate investment clubs hold regular meetings, at least once a month. These meetings are used to make key decisions for the group. The group can elect officers such as president, vice president, treasurer and secretary to preside over meetings and manage the group. Additionally, committees can be formed that perform special tasks such as scouting out potential property investments. Meetings can be held in person or as teleconference over the internet if many of the members are not local.

Step 4      Monthly correspondence in the form of a newsletter is a good idea and can be sent out to members to keep them up to date on current events as well as when the next meeting will take place. It’s also a good idea to invite professionals such as real estate planners, realtors and brokers, financial planners and tax specialists to speak at meetings to share their experiences and educate the members of the group or even to get ideas for new investments.

Step 5      Deciding how much money to invest can be tricky. It is often best to start out small and work your way up to larger investments. The more members you have the less money each will need to invest. On the other hand, the more members you have the harder it would be to come to unanimous decisions. When starting a real estate investment club, write up bylaws that everyone agrees to. Be sure to include how decisions will be made and what power the president has, if any, to resolve disputes or override decisions. We have always recommended to our investors to invest in one project at a time.

For additional questions, please comment or email info@scavuzzoassoc.com

Visit us http://scavuzzoassoc.com

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Unlicensed & Uninsured Building Contractors in Florida

Unlicensed & Uninsured Building Contractors in Florida.

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Unlicensed & Uninsured Building Contractors in Florida

The Florida Department of Business and Professional Regulation often canvases emails to licensed professionals about their efforts to stop unlicensed activity. And, their effort, while not very effective has another big problem? Limited by a lack of funding which results in less enforcement and compliance, they often write about unlicensed activity and what consumers can do to protect themselves, they mention checking the contractor’s license of the person performing the work. They should also inform consumers that the company or person that they are entering into a contract with is the same person or company listed on the license. This is because an unlicensed contractor will have used another contractor’s license to pull the permit. This is illegal and is called aiding and abetting an unlicensed contractor. The DBPR should create a task force to not only educate the consumer but the local building departments as well.

I will give an example of a recent case where I was called because the contractor they hired was given a large amount of money to do a renovation to a condominium in Sunny Isles, Florida and never showed up to do the work. After meeting with the building department to see if a permit was obtained, sure enough; it wasn’t. To make things worse, when the lady at the counter asked the name of the contractor (American Contractors) she laughed and mentioned that she has herd of other cases in nearby buildings Oveanview Condominiums 1, 2 & 3, Park West & The Hemisphere Condominiums. This contractor was referred by a friend that lived in a condominium in Aventura, FL. I asked to see the contract and it stated “American Contractors” “Licensed and Insured” and it appeared to be hand written on a 2 part invoice and a scribbled signature that I could not make sense of.

The point of this blog is to make you aware of what to look for, let’s start with a few easy ones:
1. The proposal has to be typed on letter head bearing a physical license number.
2. Clearly states the name of the license holder
3. In my contracts, I always include a copy of my license and insurance. (This makes it easier to look-up the information i.e. license verification.
4. A construction schedule, preferably a Gantt Chart. If the contractor does not have a schedule or just throws out a date. Chances are, there is none?
Construction is no longer about the fancy truck or tool belt; we have subcontractors for this. It’s about management and complying with the technical aspects of construction. With the increased amount of codes being added every year; your contractor should be familiar with them. Because let’s face it – Building Inspectors are and will demand that not only the plans are being followed but the building codes as well.
Finally, if your contractor is not licensed then he is uninsured and if you signed a contract with a contractor that is using someone else’s license; it will be very hard to get your job done without costly delays.

Please post your comments, share & colaborate with others; GET INFORMED.

www.scavuzzoassoc.com

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Protecting Yourself against Unlicensed Contractors in Florida

I must run into two to three people a week that has hired a contractor and don’t even know if they are licensed or not. I have one such case where the contractor spells out in there hand written proposal “Licensed and Insured”. However, after questioning this contractor, it is found that he is not licensed as a Certified Contractor nor has any insurance. Without boring my readers with the details of the law which I have provided below, the simple question I get is: Why is the license or having insurance so important? Well, let me give an example of a typical scenery.

A Contractor is hired to do work for you, and in this example we will use a condominium as an example. And you have hired this contractor to do work where there will be multiple trades involved and the contract amount is about $100,000 worth of renovations. Moreover, this contractor asks for you to write the check to their personal name and later we will find the reason is because, the contractor  does not have a legal or registered corporation.

As obvious as this example is, most people fall into the same trap. Let’s say 95%

Let’s move on to the fun of construction, the materials are delivered to your condo unit, however, the granite walls in the lobby and elevator is damaged and now you have the property manager calling you. Once you get past that fiasco, one of the workers get injured by falling from a 10′ ladder and has to be taken to the hospital but the worker nor the contractor has any insurance let alone; workman’s comp. Well now you just became responsible for the hospital bill and a potential lawsuit from the family of the injured worker. And since the permit was signed as the Owner/Builder, and the city inspector is not satisfied with the work, another problem mounts to the others. And, to top it off; the contractor has not paid the workers/sub-contractors and now you have liens on top of that. A COMPLETE NIGHTMARE!!

I run into these cases every single day and my first reaction is? Did you not see this coming? No easy answer, but if you are going to go through the trouble of renovating or building; Get Informed! I don’t care what state or county you are building in, one thing is for sure, Con’s will be there. So you need to ask questions. If the person makes you feel the question you just asked is dumb or you just don’t know or understand construction. I guarantee you, they are hiding something. I spend a countless amount of time making sure that my clients are well aware of what they are getting into and answer as many questions and encourage them to email me as questions arise.

The days of a guy jumping out of a big Chevy Dully with the bright tool bin slung across the bed and a metal clip board eager to start the same day is gone. Most of those guys could not read or interpret the building codes let alone read a set of plans. And the metal clip board, that is to give the quote, ask for a large sum of money and be lucky if this person comes back to start the work within the month.

Here is how a typical construction payment schedule should look. First, get a detailed breakdown of the costs from the different trades. The Architect/Engineer is usually the ground level of the project. ONLY pay for the plans to start. Once a permit is obtained, a construction schedule and schedule of payments will go into effect. Have a penalty clause for not meeting the deadline in the separate intervals of construction. And, never, never give a down payment that is more than what is allowed in your state, most states are right around 20%.

HERE IS THE LAW

According to Florida Statute 455.228, if you hire an unlicensed contractor, the Department of Professional Regulations (D.P.R.) may issue a cease and desist order and also may take you to Circuit Court, which has the authority to impose a civil penalty of up to $5,000 for aiding and assisting unlicensed activity. You could also be liable for court cost.

• If you pull a permit for an unlicensed contractor, you are held responsible for the work, not the contractor.

• If you hire an unlicensed contractor, you may actually pay more for the job, than if you hired a licensed contractor. Especially, if the work is done incorrectly or never finished, you may have to pay twice or more for the same job to be corrected or finished.

• If the unlicensed contractor fails to pay his sub-contractors or suppliers, you may be required to pay them, even though you have already paid the contractor. • Plumbing, electrical, and heating and air conditioning, mold assessment/remediation work should be done only by contractors and craftsmen certified in those trades and may require separate permits.

• Home or Building improvement or Code Remediation contractors must be certified by the State of Florida as either a General, Building, or Residential contractor. • Roofing contractors are required to be certified or registered by the State.

• There is no such thing as a “legal” jack-of-all-trades.

• An “Occupational License” is not a regulatory license or a certificate of competency, but a tax for the privilege of engaging in or managing a business, profession or occupation.

• You may be held liable for injury on your property if the unlicensed contractor has no insurance or Workman’s Compensation.

The State of Florida is doing all it can to protect the public against illegal contractors by educating the public and offering the following suggestions. Watch for the following warning signs, these may indicate the person/company is not certified.

License information can be obtained from the D.B.P.R. web site:
http://www.myfloridalicense.com

Visit us at: http://www.scavuzzoassoc.com

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Fire Departments in the Building Violation Business?

Whether it’s a mezzanine or a missing extinguisher, Fire Departments around the country are on the hunt for building and code violations and they have added a built in feature; getting you to pay daily fines. Try to fight them? Not even a chance! With highly skilled and trained enforcement officers, most such as the Metro-Dade Fire Department are working hand-in-hand with the Neighborhood Code Compliance Office’s that has been recently revamped by Mr. Charlie Danger and these guys know exactly what to look for. Hiring a well-qualified Architect / Contractors office to mediate these infractions is probably the only and best defense to combat these inspectors because they will cite everything down to the old coffee machine that is plugged into a burned electrical wall outlet.

My partner and I spend countless hours at building departments trying to negotiate a reasonable and realistic settlements for our clients. Sounds easy? Well, not even close, especially, when they are trying to throw everything but the kitchen sink at you. They are trained to make you weak. And you say, “Is this the government agency and what we pay taxes for?” Well, the best answer is yes. Property taxes alone are not enough to pay the bills; commercial businesses have become the target for additional revenue to pay for the county’s earmarks (i.e. the baseball stadiums and waterparks, etc…).

The internal additive is, the bigger the violation the harder it is to satisfy within the allotted time given. This is where negotiating a reasonable settlement is the best way to meet the deadline. For instance, I will give an example of a simple small warehouse with an illegal mezzanine. The citation will read, “The mezzanine has to be removed, unsafe structure Florida Building Code; blah,blah” First thoughts are: “how about my offices below? That mezzanine has been there for 20 years! And, you’re only giving me how long to correct this”? Yes, and don’t forget, your displaced employees, loss of business and stress. Then you think, I’ll just talk to the inspector and see if I can sweet talk him or paperclip the 20 to the back of the driver’s license trick or I will file a complaint because the inspector was nasty to my employee. Folks, It does not work!

Remember, you are at the disadvantage and these inspectors will not chance losing their paycheck in this economy for you. And yes, unlike us, they get a paycheck once a week and your new founded problem is not their problem or even a hardship. Sounds harsh, but it’s true and as you can see, my job is not as easy as you would think but I do make my client problems my own and I immediately take ownership of the situation, meeting with the inspectors, drawing the plans and finally, getting our construction crew on site to ratify these issues so you can get back to work. I’m with you every step of the way; not a project manager.
Recently, I have met with condo association boards and it amazes me that Bob the cabinet maker that has been cited for building shelves that extend to the top of the warehouse, flammable glues that can set the entire building on fire and, Oh yes, not even one fire extinguisher in the entire facility. You know, the guy that does not even speak at the normal meetings or a simple hello while passing buy is the new leader of a complex that is riddled with code compliance issues and of course he knows the code and the first suggestion is: “Let’s sue the County, they can’t do this” After listening to this guy ramble for 20 minutes or so, I will ask, “What is your premise” Of course that went over his head but he is mad and wants justice.

Be careful with the Bob’s in your association that is ready to spend association funds to sue a county. And yes, it is ridiculous because cities and counties have attorneys too and will spend your tax dollars hiring other top law firms to defend them. The only thing an association can do legally together is, to hire an attorney to make sure your problem does not become theirs and as far as you hiring an attorney to sue? They will settle every time, unless of course, you have a lot of money to defend a case, in court, with a non-winning cast to prove a point. I cut through all of this aggravation and hone in one the resolution of the problem.
My name is Marc, my clients know me as the Fireman of Construction; I put out fires.
the kitchen sink at you. They are will trained to make you weak. And you say, “Is this government that I pay for?” Well, the best answer is yes. Property taxes alone do not pay the bills; commercial businesses have become the target for additional revenue to pay for the county’s earmarks (i.e. the baseball stadiums and waterparks).

The internal additive is, the bigger the violation the harder it is to satisfy within the allotted time. This is where negotiating a reasonable settlement is the best way to meet the deadline. For instance, I will give an example of a simple small warehouse with an illegal mezzanine. The citation will read, “The mezzanine has to be removed, unsafe structure Florida Building Code blah,blah” First thoughts are: “how about my offices below? That mezzanine has been there for 20 years! And, you’re only giving me how long to correct this”? Yes, and don’t forget, your displaced employees, loss of revenue and stress. Well, remember; these inspectors get a paycheck every week and your new problems are not a hardship.
As you can see my job is not as easy as you would think but I do make my client problems my own and I immediately take ownership of the situation, meet with the inspectors, draw the plans and get our construction crew on site to ratify these issues so you can get back to work.

Recently, I have met with condo association boards and it amazes me that Bob the cabinet maker that has been cited for building shelves that extend to the top of the warehouse, flammable glues that can set the entire building on fire and, Oh yes, not even one fire extinguisher in the entire facility. You know, the guy that does not even speak at the normal meetings or a simple hello while passing buy is the new leader of a complex that is riddled with code compliance issues and of course he knows the code and the first suggestion is: “Let’s sue the County, they can’t do this” After listening to this guy ramble for 20 minutes or so, I will ask, “What is your premise” Of course that went over his head but he is mad and wants justice.

Be careful with the Bob’s in your association that is ready to spend association funds to sue a county. And yes, it is ridiculous because cities and counties have attorneys too and will spend your tax dollars hiring other top law firms to defend them. The only thing an association can do legally together is, to hire an attorney to make sure your problem does not become theirs and as far as you hiring an attorney to sue? They will settle every time, unless of course, you have a lot of money to defend a case, in court, with a non-winning cast to prove a point. I cut through all of this aggravation and hone in one the resolution of the problem.

Our name is Marc & Mike Scavuzzo we are here to help and our clients know us as the Fireman of Construction; We put out fires.

Scavuzzo & Associates P.A., Marc Scavuzzo CGC 1515090, Michael A. Scavuzzo RA 00004956

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Building Inspector: Friend or Foe?

It is late morning and you are wondering where your building inspector is? You certainly know where he isn’t; he isn’t approving the most recent work so that you can move on with your project. Your inspection was scheduled for first thing in the morning and the inspector finally shows up near the end of the day. On the one hand you want to yell, scream and complain; on the other hand you know that you need him to sign off on the work so that you can proceed. Outwardly you are respectful and cordial; inside you are seething and thinking, “Next time I’m doing this without permits!”

Do I Really Need Permits?

It’s very tempting to do renovations without pulling permits. It may appear that you will save time, money and a big hassle, but at what cost? The primary reason that municipalities require permits is so that they can be sure that work is performed to acceptable standards and that it meets all building codes. The codes are created to set minimum standards for safety and appearance. These standards give home buyers a reasonable level of assurance that a home is safe for them to live in.
A lot of cosmetic work can be done without permits. Installing new carpets, painting and landscape changes normally do not require any kind of approval. However, major renovations involving plumbing, electric, foundations, extensions etc. always will. A good starting point is your local building department if you have not retained the services of an Architect or General Contractor, they can give you a wealth of information on what the requirements are. When in doubt, give them a call. They are there to help.

So Called Professional that works without Permits!

When working with contractors you need to be careful. If they tell you that they don’t need permits to do the project you should check to be sure. It could be that they are unlicensed or they may be looking to cut corners. Be especially wary if they say that you can save money by not pulling permits, you may end up paying a lot more in the end.

Construction worker

The building inspector will check a contractor’s work to be sure that it is up to par. If the work is shoddy it will fail inspection. This is a case where an inspector can save you a lot of trouble. If the work fails inspection the contractor will have to make it right and they should be the ones bearing the cost for any corrections that need to be made.

County vs. Municipality

When working with a building department in a large city you a probably dealing with a bureaucracy and may not see the same inspector twice. In a small town, you will most likely deal with the same inspector for multiple inspections. I personally like dealing with small cities, this gives the inspector a chance to create familiarity with your construction project. Furthermore, you will need to adapt to the local conditions of your building department. In a large city you want to develop a good reputation so that inspectors know that you are easy to deal with. In a small town you need to make the inspector your friend. Making an enemy of a small town inspector can be the kiss of death.

Permits, inspectors and inspections can be a big hassle. However, in the long haul, they may save you a lot of grief.

Marc Scavuzzo, M.A., Assoc. A.I.A., CGC, LEED AP of Scavuzzo & Associates P.A., Architectural, Engineering and Construction Services

We offer FREE Construction Planning. Give us a call at 305-776-8921 and/or ask for references or visit our company website www.scavuzzoassoc.com

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40 Year Recertifications- South Florida Building Recertification

Planning is the Key to Understanding

If you are reading blog, chances are, you have received a notification from your City or County requiring you to perform a 40 year Inspection of your property within a given amount of time. Here at Scavuzzo and Associates P.A. we have performed many of these types and other construction related specialty inspections. The first thing that comes to mind for many is the expense required and aggravation to not only performing these inspections, but to perform any repairs that are needed as well.

First, you need to know that we are on your side. Many inspection companies want to “cover their basis” by requiring repairs that are not necessarily required such as: plumbing, site work, and mechanical. We will only mention items that are SPECIFICALLY AND ABSOLUTELY required by the criterion of the 40 Year Recertification. Provide you a detailed list (if there are items that are to be repaired)…and follow-up with an inspection to provide you with a “100% clean bill of health” so that you can then get your certification problem-free from your City or County. We make a commitment to you that we are with you every step of the way.

We have been performing these inspections for over 30 years, longer than most other inspection companies out there which afford us to provide you this service not only at a reasonable price but hassle-free and keep your repair costs at a minimum. Having a team of Architects, Engineers and General Contractors make us very familiar with all of the facets of the construction trade and have prided ourselves on the relationships we build not only with our customers but many of the Building Departments. Moreover, our staff has made a pint to work hand in hand with these officials, which is quite important… they are familiar with us. As a matter of fact, we are on the referral list of companies that the cities give out to those who need these services.

Selecting a company that will provide these important inspections is a very important step in the process. You need to ask:

  • Do they provide all of the professional inspections IN-HOUSE?….Yes, WE DO!-
  • ·Do they provide a list of repairs (if needed) and within the same report and a cost valuation?….Yes, We Do!
  • Do they provide IN-HOUSE structural and electrical professionals that can provide recommendations for repairs (if needed)?…Yes, We Do!
  • Are they a reputable firm that has been performing these inspections and how long?…Yes, We Have! Michael A. Scavuzzo R.A. has been in private practice for over 35 years.
  • Do they have a list of Satisfied Customers which can be called as a referral?…Yes, We Do

Hands down, in South Florida, Scavuzzo & Associates is absolutely the best value in town when it comes to performing the 40 Year Recertification. We take the extra steps to keep your repair costs down.

Give us a call at 305-776-8921 and/or ask for references or visit our company website at www.scavuzzoassoc.com

Michael Scavuzzo, R.A. 00004956

Marc Scavuzzo, CGC 1515090

Many of our customers ask, “Why do 40 Year Recertification’s exist”? When receiving their notice from the city or municipality advising that a 40 year recertification is required on their property?  A common reaction with disdain due to the additional and potential costs and aggravation that may be incurred through the process. Although it is true, there could be additional costs, the fact remains is that these 40 year re-certifications are at the forefront of a state-mandated program to ensure public and building safety. Many buildings undergo numerous changes throughout the years which many are performed without permits and pose a serious hazard. Other buildings are just old and contain hidden risks that may otherwise go unnoticed until it is too late. Through this policy, a design professional through engineering expertise is certifying and taking responsibility for the safety of the property.

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