All Forum Posts by: Danny Day

J Scott same exact thing I was thinking. Coming in 50-50 financially does not make sense on my part. If he backed 100% finances and I did the rehab that would make more sense splitting profit 50-50

What are your thoughts on a partnership agreement for rehabbing / selling? More so I'm talking specifically about silent partners, who want to take a profit but not do any work.

How would you structure this agreement?

I've had someone who wants to take on a partnership with me on a 50/50 split, and wants to split costs 50/50 - but he is out of state, and would not control rehab. I would be in charge of locating, inspecting, closing, rehabbing, selling the property.

Not sure if this is the best arrangement on 1 deal. Could there be a benefit to scale?

Thanks in advance

Jilliene Helman send me a private message and we can discuss.

J Scott thanks for the clarification. I'm in agreement with you about holding off on doing your own work. With the time I invested doing that, and the delays it took on the job I feel like I could have had it under contract already.

Joel Owens Yes.. this is my 2nd single family rehab. The deals in the future will be higher margin based on learning curve and sourcing my own deals. I'm happy making an extra $3,750 per month before taxes. I am not a real estate broker, and its not worth my time to be.

I would like to hear J Scott on the learning curve of the 1st few that he did.

JP Quesnel Got this one through a wholesaler. They made $5k on this deal with no risk.. This is why I am educating myself on sourcing my own deals.

Brian Hoyt yeah I agree. Profit is a profit. From my numbers I should come in around the $15k mark. If it sells fast maybe $17k. We'll see what happens..

Sam Craven I've got good before photos, some mid rehab, and will have the photographer come through there tomorrow. I'll put them up shortly. Its changed a lot since you last saw it!

Bryan A. yes you're right this deal is very thin. In all honesty I went against the 70% rule because of the location of the house (right in an area I grew up in). I wanted to rehab one right by my old house. This was also a good learning lesson not to buy anything above 70%.

Eric Wade yes I actually used ISB to fund this deal. I've got no complaints with them. Zeus dropped the ball on me and I got rid of them. I would stay far away from Zeus for hard money. I've heard of Rent Ready but never used them before. I didn't hire a GC on this.. everything was subbed out. I think I saved a few thousand doing this.

David Midgett Thanks David.. I'm actually a licensed agent in Tx, but my license is inactive. I didn't see the need for another RE agent to market my property.. all I needed was MLS exposure and I could handle the rest. I've never done flat fee before but it seems very cost effective if you know what you're doing on the transaction end. Every day I learn more on the cost estimation end. There were some unavoidable overages I could not have foreseen, but there were also ones that I should have known. The most expensive being painting.. I did not account for primer on the walls.

Thanks for comments, will keep you updated on sale.

Hard money & carrying costs

We went under contract on March 8th, closed on April 16th..listing today. Supply is down in Houston, I am confident in this sale. I think I'm going with flat fee brokerage from now on.

ARV $125,000
Purchase $70,000
Rehab $23,000

Estimated time frame: 2 weeks
Rehab time frame: 4 weeks
Budget: $18,000

Analysis: Went 2 weeks over the estimated rehab time frame because I decided to to some of the work myself (make ready, landscape). This ended up delaying the project for an extra two weeks while we worked at night after my 9-5. Not sure if this was the best play. At most I think we saved $1,500.. Ended up listing with a flat fee broker (1st time to try this) for $250 for the lifetime of the listing.

Upgrades:
-New roof
-New carpet
-New tile
-New paint (interior / exterior)
-New light fixtures
-New ceiling fans
-Master bath remodel
-Granite counter tops (whole house)

Lessons learned: Always change the locks on your rehab, on day #1. We had the previous owner come by the house, break in, and steal the shed in the back yard. Luckily we had their contact info and we told them we wanted the shed back or $200. We got paid for it, but it was an eye opening experience (that people would do something like that). Also had a hard time closing the deal up front with a HML we had never used before. After 26 days of not being able to fund the deal, switched lenders right before seller wanted to back out and closed it out in 3 days. We went over budget by about $5,000.. we made up for the loss on the flat fee listing end saving around $3,500 on selling cost.

Putting the sign in the front yard today, photographer comes by tomrorow. Should be on the MLS by Wedseday.

Here's to a quick sale!