All Forum Posts by: Andy Sabisch

Good summary of what your market is looking for but as we all know, each market tends to have its "wish / want" items which differ from market to market.

Flow is definitely a selling point but make adjustments come with a cost.  Some markets can support that expense and others can't.  I know that anything in California price-wise is far above many parts of the country.  For example, here in NE PA, you can buy a 4/2 on a lake for under $500K while in CA, $500K will get you a starter home in most cases.  We try to find properties that either be modified while keeping the sales price in mind or have a flow that works just needing updating.

The open concept is another point that works for some but not the way it was pre-pandemic in many areas.  The pandemic forced people to work from home and having spaces that worked as offices became important.  We still find buyers (and renters) that like open to a degree but want / need the office space for remote or hybrid work arrangements.

When dealing with a market that does not have huge spreads on properties, one needs to define what is really important versus what is nice to have and see if the math works.  In the markets we deal in, numbers can kill deals that would be home runs elsewhere but a 2x4 costs about the same in both (just the sales price does not support a rehab that would be middle of the road in a place like CA.

Having before & after pictures is a string tool when dealing with HMLs and real estate agents to gain business.  We have seen that having a professional marketing piece builds credibility which is invaluable in this business.  It even helps with finding contractors as you can show them what quality you expect and they in turn can show you what they can do.

Will it help you sell more or get more money?  No sure about that as buyers want to see the finished product and showing them before pictures will often not be well received.

Question . . .our leases have a NO SMOKING INSIDE clause.  On one of our duplexes, the tenant on one side reported that the smell of marijuana is coming from the other side.  Not going to get into a discussion about people being able to do what they want in their house but in PA, recreational use is still illegal.  How would you deal with the report from the other tenant and how do you confirm that the smell is actually marijuana.  Thanks in advance . . .

Quote from @Hermes Kanaris:

I appreciate all the replys guys, everything i read on here is so helpful since im new to this business. A little update with the bank, they are now telling me that they aren't even going to consider a settlement or a short sale unless the past due 14 contractual payments (around 8-10k) are paid. EVEN IF THEY ARE PAID they cant guarantee that a short sale will even be approved AND cant guarantee any price. I asked them, what do you usually short sale properties at %? they said around 90% of market value.

I tried to get them to understand that this property needs a LOT of work, almost a full gut, some holes in walls (small) old carpet needs to be ripped up, i mean like the works on this thing, you can prob get away with touching up the kitchen since its real hardwood and the bathrooms as well but this prop needs at least 80k.

Found out owner actually owes 140k on property, and zillow is zestimating it to be 127k. Im not really sure how to save this deal... I don't even think its worth a sub-to

We had a similar deal last summer that looked like it was on a glide path to closing and then the REAL numbers came to light and the wheels fell off the bus.  If the numbers do not work, be very careful about trying to MAKE them work by taking a little from here and a little from there.  If you are getting what you are from the bank, you need to step back and assess the deal.  Walking away is better than proceeding and finding yourself upside down and owing money . . . there are always more deals.  Your numbers are close and assume no more work is needed than the big ticket items you mentioned.  Have you been inside?  Are the rest of the repairs cosmetic or structural?  If you need to have a contractor walk it down, go that route.  Working with a bank on a short sale is not as simple as it might seem - most have never seen the property and are looking at spreadsheets alone.  The one we walked away from needed a roof (and more) and was leaking inside the property - bank could not have cared less.  Good luck on the deal but make sure you know ALL of the costs before you lock it in as it can easily make a great deal look 180 degrees differently.

As others have said, the settlement that was reached in 2024 requires this contract for an agent to show you a house.  With that said, unless you know the agent's abailities, do not go out more than 45 days.  If they do not have a property for you by then, start interviewing other agents. Investor savvy agents are few and far between so take the time to find the right one - you are not looking for your forever home and simply giving the agent a list of homes you want to look at which is what most agents do anymore.  Finding an agent that knows the market and can find you properties that provide a profit (for both of you) is worth the effort.

One more thing about the contract . . . be sure to read the ENTIRE document and ask for clarification is needed.  We recently looked at a property outside our agents area (2 states away) and found a fee that was added which we questioned and were told it was a mistake and was removed . . . not sure if it was a mistake but be sure to read these new contracts BEFORE signing as things have changed since August.

Having read several books on the art of estimating over the years, I have found that most are good for a few tips that can help but for a newcomer to the rehab business can leave them on shaky ground.  The difference between the cost for a specific repair / renovation if you have a crew or need to find someone on a first time basis can be significant.  We have trades we use on jobs and know what they will charge which is often considerably less than what Joe Homeowner would pay for the same job . . . the trades know we will be using them again and again.  The renovation shows on TV reinforce that.  Some of the costs quoted shock even seasoned flippers as they are lower than even material are in many markets.  But again, dedicated crews drive reno costs down.

If you can connect with a flipper in your area (quick out your local REIG) and ask to come along when they scope out a job, you will get more from one or two trips than from a dozen books.  We have put together forms that allow us to scope out properties on a walk thru and be pretty close to the final cost.  My wife and I do it separately and see what each of us may have overlooked.  Need to be sure you include the "unknown budget" and never take the optimistic approach as it is better to have money left at the end than writing more and more checks that were unplanned for.

Again, if you can walk through an actual property and compare notes with someone that does it in your area (key factor), you will be way ahead of what a generic book can give you.

We had our 3-year township CO inspection today and were told that we need to have smoke / CO detectors that alerted both sixes of a duplex property.  This is a new requirement from the town (which we were not aware of) and while we have detectors in there now, they are not connected between the two sides.  Has anyone dealt with this requirement and if so, what systems do you recommend.  What is there now is a hardwired system on each side but we need one that talks across the property.  Thanks

Here's a general question.  We have a pretty solid lease that has served us well on our properties but on the most recent move-out by a long-term tenant that always paid early, we had to clean from floor to ceiling and everything in between.  Does anyone have a cleanliness clause in their leases that that invoke when they do periodic walk through?  When we do ours we check smoke detectors, fire extinguishers, sump pump operation and overall condition but have not focused on cleanliness.  Be interested in what your thoughts are to include this in a lease (needs to be maintained to some defined degree of cleanliness rather than waiting until move-out and deduct cleaning charges from their deposit).

You should be able to insure it as a MFH from Day #1.  Shop around to see where you can get the coverage you want at the price you want . . . we have done well with Steadily as they shop carriers and can get what you want for the specific situation you are in.  You will probably get other recommendations from other BP members.  If you want details on STeadily and our agent who is first rate, feel free to message us . . . we have used them for move-in ready properties through complete rehab properties (from rehab thru renting to tenants).

What is  it that they are offering you to help in the process.  We have found that finding an investor-savvy agent to buy property on market and a solid wholesaler to buy off market properties is the perfect marriage to find deals.  As far as selling, we have used a flat fee broker for the past 5  years and what we have saved really adds up.  If you know the market and where to price your property, a listing agent is really not going to add a lot to the process and will cost you 3%,  Now before I get blasted by agents posting how mush they add to the sale on the listing side, I will say that if you are not familiar with the sales process, maybe you need to pay the 3%.  We use a listing broker that charges a nominal fee (under $300) and then we get photos taken ($250) and use the listing showing service to set showings.  When an offer from a buyer comes in from their agent, if we accept it, we contact the title company we use and send them the contract . . and they take the deal to the closing table.  Might not be the option for everyone but it saves us about 2.75% per sale which is rolled into the next deal.

See what you are getting on the buy and list end and interview a few agents to find one that meshes with your expectations.