In February, I wrote a post about my first Brrrr which I managed from across the world - seen here. For that project, we relied heavily on family to subsidize our costs and help perform the work at a lower cost. This wasn't something we wanted to do again for various reasons, so for the second house I needed to get a lot more creative to figure out how to manage things without relying on anybody else...here's how we did it!
During my summer vacation, I was lucky enough to find a place I thought looked good that I was willing to take a risk on. I was only in town for 2 weeks, so I needed to move quickly. We found a 3-2 SFR on Hubzu in Roswell, NM with a starting bid of 28,000. I went to look in the windows and funny enough, the front door was wide-open. I took a look around to discover that there were some great bones to the place but it needed a LOT of work. New roof, duct work, paint inside and out, extensive drywall needed, broken windows, replace all light figures...we're talking a lot of work! Still, I figured I could get the job done for 25,000-30,000 and thought that it would yield an AVR of 85,000. After walking around the place with my handyman to get a pretty good idea of what everything would cost we decided to move forward on the project. We won the bid for 30,000 and were off and running (note, contrary to some of what I've read, working with Hubzu was incredibly smooth and we closed in 23 days - I'd work with them again without reservations).
In terms of work, I wrote up a contract with my handyman and we agreed that we would talk over skype several times a week and that he would send me videos over whatsapp on a weekly, if not daily basis. Since he was a handyman I'd never used, instead of giving him the 7-10k needed for materials, I had him call me from the check-out at home depot each time he needed to make a purchase. To pay him, I wired the money directly to him from my bank account once at the start, middle and completion of work. Overall it didn't end up being too difficult to manage and now that we've built up some trust, I'm happy to give him more leeway the next time. My father-in-law did help us by going to the house when contractors needed in and by painting the exterior at a steep discount, otherwise we relied completely on me phoning people from the other side of the world to get things done.
Like many first-time flips, we underestimated our costs a bit...though honestly, I could have come in close to budget but we did a bit more finish work than anticipated as our realtor thought we could get more than 85000 out of the property. Fortunately, our extra spending was exceeded slightly by the extra money we got on the sales price than we had hoped for.
In the end, we closed on the place last week for more than we'd hoped and ended up with a healthy profit. It was relatively stress free (at least now, in retrospect) and we're looking for another property. This time, now that I have a team in place of plumbers, roofers, a good realtor, several handymen, etc, I feel confident enough to make the purchase site-unseen as we'll not be home until the summer.
Here's a few photos, feel free to ask any questions if you have them.
