As a builder it is required that you hold two types of insurance:

• Workers Compensation
• Liability Insurance

The yearly price of these insurance policies is dependent on 2 factors:

• How many homes a year you are building
• What percentage of the work is done by sub-contractors and how much is done by employees.

The higher percentage done by sub-contractors the higher your yearly policy costs, because Insurance agent have to presume your sub-contractors don’t have these types of insurance policies on their own. And if something happens during the construction process on one of your sites while you don’t have these types of insurance policies, the sub-contractor can come after your personal assets. The approximate price it will cost for both these insurance policies for me this year is going to be about 8 - 10K.

Building regulations and laws are changing in the coming weeks in Newark, NJ. Currently my plans show a 1 car garage and a recreational room with a 1/2 bath on the bottom floor, this is and was the current standard for a two family home in Newark.

The problem that the city of Newark is facing is that several of these owner occupied building owners are changing that recreational room behind the garage into an illegal third apartment. Allowing them to gain additional rent and avoid adding a sprinkler system and paying additional taxes.

Since its going to take longer than expected to receive my New Home Builders License from the state of New Jersey, I can’t afford to wait to receive my license. I have found a builder that has agreed to put the licenses in his name, while I await mine.

Upon receiving all my licenses, and once the plans are approved I can simply apply for a change in contractor and switch the names on the permits to the new contractor, me!

There are definitely more preliminary steps than I imagined in turning in your drawings to the City of Newark for approval.

I have been up here for the past 24 hours and have learned there is plenty of paperwork to go through before getting started, but the good part about this all is that everyone says this is the hard part because it requires the most running around. Once construction starts its all coast from there (we’ll see about that!)!

Yesterday we met with the plumber who will review the plans and pull the permits to get the job done, but in order for him to pull the permits I need to send him a certified check in the amount of $3200 made payable to the City of Newark Water and Sewage. For him to give me a proper bid on plumbing and to pull the permit its a 24 hour job once he receives the money, because we can’t expect him to put his money for the permits out of his pockets.

Now, just because he has sealed and pulled the permit doesn’t mean I have to get the job done by him. I can shop around later and find a better price if need be, but he is the most recommended in the city of Newark at an affordable price.

This afternoon we dropped off another set of the plans to the electrician, who will review the drawings and pull his permits by next week, along with giving an appropriate bid. Again, its not necessary that I need to go with him to do the job, but for right now we get him to pull the permits and bid on the job.

Finally, the last license that needed to be completed was a Contractors License for the City of Newark, which needs to be renewed on a yearly basis. This was completed in about 30 minutes total.

• Fill out the application
• Get it Notarized
• Get a money order in the amount of $125 made payable to the City of Newark
• Go to the police station to get a criminal check done, if approved they will stamp it
• Finally take it to the county building and they will print your license in a matter of minutes

It may not seem like a lot of running around, but when everything is in a different building, it definitely takes time!

Whether you want to develop one lot or multiple lots, you need to apply for a New Home Builders License with the state of New Jersey.

The application takes 10 mins to fill out, but up to 20 working days to be approved. You want to contact the State of New Jersey Department of Community Affairs at 609.984.7563 to receive your application.

This will allow you to become a licensed builder in the state of New Jersey.

The submittal fee for this application will run you $200 (one time charge).

“ Start up ya own company, trademark the name
That’s gon’ run ya bout a grand so start savin’ ya change
Open a bank account quick, and then follow these steps
Sign yourself to yourself and start signin’ ya own checks”

These are probably the best lyrics I’ve heard Ludacris spit. This couldn’t be any more true, whether your looking to start up real estate company, restaurant or anything else, these are some of the very first steps you should take.

I talked to my accountant a few weeks ago and he informed me to create an LLC. In the future as I and you do multiple properties at a time each property should be its own LLC. For now since I’m only going to be doing this one property over the next few months I have incorporated the following name: “Building From the Ground Up”.

This will be my main corporation for investments and contracting purposes for years to come, but as I grow I will incorporate each property as its own LLC. For example, I would just make it something along the lines of: “99 South 10th St., LLC”.

For me to incorporate the 2 simple steps here: http://www.nj.gov/njbgs/

To incorporate your business and receive a business license will run you $125.