All Forum Posts by: Angelique F.

I've studied Lisa Phillips and thank God for her.  I learned so much from her.  I just purchased my first investment property, (well, I don't close till Thursday) for 10K.  The area is up and coming and I couldn't be more excited, (yet scared to death) at the same time.  I'm thinking about video taping the entire process of the rehab, maybe even the closing:)

Ok, thanks Mr. Syrios. I asked because all kinds of costs associated with (selling) the property are included in the 70% rule, so I didn't think using that rule would be appropriate, and might even get me into trouble during negotiations, lol.

You have given me some other formulas that are probably better for my purposes.

I've recently learned how to determine how much to offer on a wholesaled property if I was going to flip it, but is there a calculation I should use if I'm going to hold it?

Thanks

I see. So I guess I'd need to find out what labor costs would be, make sure I'm getting a 30% discount on the wholesale price, make sure his material costs are calculated correctly, then calculate the 50% to see if its fair for the contractor since it should be about equal to his labor cost, right?

Also, can you tell me if I were to calculate rehab costs at say $28.00 per sq ft on say a 1200 sq ft home, does that include labor? If so, how do I calculate the labor portion?

Thanks Mr. Rumora!

Thank you Mike S, and I love the quote! Someone from my local REA came to me with a similarly coo coo for coa coa puffs deal, where I pay 50K for 5 homes. The homes are then rented out to rent to own buyers and I collect the rent on all 5 homes. Here I am a brand new investor so why would I want to get tangled up in a mess like that. I'll tell you the quote I like. A fool and his money are soon parted, and boy I must have a sign over my head that reads Fool Approaching. Thank GOD for this website.

* is this a bad thing, if you get 12% on your money plus another 10,000 -15,000 for not doing any work??? Seems a lot easier than running your own rehab project as a new rehabber. Just met with a guy today, first time rehabber, he had hired a gc, quote for a project believe was 15k rehab. After paying 17k, project far from done, gc left, took a bunch of materials... The new rehabber sold the property to a landlord, lost 10k....I can tell many similiar stories, if interested, of first time rehabber with similar experiences. If this guy is good, you could learn a lot, to put you in a better position to be sucessful in future rehabs

Sir, there is no 12% on my money. I explained in my first post that he proposes that I pay for Everything. As the wholesaler, he finds the property and I buy the home. As the rehabber, he rehabs the home and I pay for that. So far so good. Now it's time to flip the property and once it sells, he now wants 50%. Do you see where I have a problem with this picture?

Hi Mr. Schlabach, this guy started out as just the wholesaler. Then I find out he's also the rehabber, and in the end, the self made silent (partner) who walks away with 50%. He's playing too many roles so he can blur the lines. I thought it worked like this: He's the wholesaler and I'm the buyer, I purchase the property and my work with him is done. My job then is to rehab the property and sell it for a profit. He essentially feels he should get 50% of profits by staying involved and acting as the GC and helping to sell the property? The thing I need to find out about is rehab costs. I don't plan to rehab in amounts over 10 to 20K, so what I gotta find out is how much of that money pays for labor and how much for materials. When a contractor quotes you say 20K for the rehab, that should cover labor and materials right?

Mr. Tutwiler, my head just exploded trying to understand the posts in that link, lol. Sounds like I just need to figure out if his 50% is justified by the (work) he brings to the table, cuz he sure ain't bringing any cash. In the above example of the deal he already did, he walked away with 20K+, and the rehab costs which who knows if those costs were verified. So he's walking away with more than 50% in the end. I don't know, it don't smell right to me so I'll have to do more research on that percentage vs dollars train of thought they were talking about, and see if that will help me make sense of all this stuff, but this has been a great learning experience for me. Thanks!

That's right Mr. Meade. Now that makes more sense to me. I should go back to him with.......How about I lend you the money for the purchase at 12%, I fund the rehab, and THEN we split 50/50 when it sells? Now THAT sounds like a deal to me. But see, I answered an ad he placed saying that he had cashflow property's for sale and homes that he will wholesale that need rehab). The ad didn't mention that he was the rehabber as well.

Thank you Mr. Tutwiler for your input. He sent me a spreadsheet of all the properties he's turned for profit. They sold at very decent prices and he is selective about the homes he targets so that's good. For example one of the homes were purchased at 68K, rehab was 40K and it sold for 148K. Those are not bad numbers I guess, but I'm just wondering if I should just work with a wholesaler myself, hire a contractor myself, and make the profit myself? I agree with you in that he is doing a whole hell of a lot of work from start to finish, so is that why he should get 50%, or should he get something like 70/30 since the investor is the one funding the deal? He made 40K on the rehab so I just don't understand why he should walk away with 22K on top of that. Am I thinking about this all wrong?