Starting my first rehab tomorrow

[Patrick Philip]

I'm starting the rehab on my first rehab project tomorrow. I closed on the 15th.

I will post pictures in a little bit, I just don't have them with me right now. I have handymen doing most of the work. I will be watching and learning from them so that maybe I could do the work next time (or maybe I would still choose to hire them).

I had my first surprise that threw off my numbers when closing through the wholesaler. I didn't realize that buyer's paid closing costs with wholesalers, so this was $2,600 that was unexpected. Also, the insurance is higher than I expected. I am using REIGuard and it's just over $400/month because I have to get "named storm" coverage due to me being in central Florida and this being hurricane season. She said she would try to get it lowered to about $300 and get back to me tomorrow.

I also had another unexpected $1400 roofing bill. I didn't get an inspection before I put the down payment. A 4 point inspection does electrical, plumbing, a/c, and roof. The utilities were on when I looked at the house so I knew the first 3 worked. I asked the wholesaler if he knew anything about the roof. He said he knew it had no leaks and would try to get a roofer over to look at it. This was before I even knew what Hurricane Irma was. No roofer would go look at it on a Saturday or Sunday so I just decided to put the money down on the weekend because I didn't want the deal to be taken. This was the best deal around by my original numbers. The hurricane tested the roof and there were no leaks. I had a roofer that I've used previously look at the roof after the storm and he said he suggested re-attaching some shingles to where they meet the flat roof and this would be $1400. I decided to pay for it, so that was another unexpected $1400.

As it stands, I should be making just about $10,500 after commissions and federal income tax. The purchase was $115,000 and the projected ARV is $165,000.

Also, my insurer (REIGuard) only provides "basic" coverage when it is in vacant status. This does not protect against theft. They protect against theft during the renovation phase, but not when it's vacant. Does anyone know an insurer that will protect against theft when it is vacant after renovation?

Correction: estimated profit of $12,357.64