All Forum Posts by: Andy Sabisch

We use wholesalers as long as they are realistic with their numbers. Most over inflate the ARV and under estimate the reno costs. For those that are in the ballpark, we have developed relationships with them and get notified of properties when they get them. Call some of the ones that posts signs in your area or look for a Facebook group that may have solid wholesalers in the group. As long as you can tell if it is a good deal, let them beat the bushes to find the properties and you just close them.

Honestly I hate to see posts where people draw a hard and fast line saying they would not get out of bed unless the deal generates at least $50K to $75K or more.  If you are in an area where houses start at $250K and go to more than six figures, you might be fine with making that cut off line.  In many other areas, houses that are ripe for flips are selling fixed up for under $200K.  We have worked in these areas and making $25K on a light rehab will get me out of bed any day of the week.  If I can get 4 or 5 of these in the time it takes someone to find that $75K minimum property, who is ahead in the end?  I am not at the point where I pass up a flip that will generate a profit - it keeps my trades busy and food on their table and I know when the home run passes my desk, I will have the people I need to take it across the closing table.

Sometimes hard and fast rules hold you back especially when the low hanging fruit is gone

There are several REIGs in your area and it would be worth stopping by at one of the meetings and ask who others use (and more importantly who they don't use to avoid learning the hard way).  

One thing you need to keep in mind is that if you are looking for a GC to give you a quote for a job on a property you are looking at buying as compared to one you already own, that free quote offer will go away quickly if you do not buy it and look for somethign else.  They need to make money too and giving out 100 free estimates with no assurance of getting a job since you do not own the property will get you on the do not call back list.  

If you have a property and want quotes, call a few and see what they can do but if you find one that works, try to stay with them as it will build a relationship that will pay off for both of you in the long run.  We have trades that will come and deal with an issue or give us a quote since they know we will keep funneling them business.

 Is there access from underneath?  we have used bracing underneath to address this issue but if not, you may need to look at replacing the damaged tread - it won't get better over time and you would hate to have a tenant fall and go the legal route

We have done a number of older homes and had to deal stairs.  You need to assess the condition of the treads - if they are cracked, make sure they are sound to leave in place.  Option 1 is what we go with and then add tread carpet pieces to put down.  They look great and saves a lot of work.  We have had to rebuild stairs a few times and that is not a fun job.

Shop around - you can usually find a color / pattern that works with your interior - here is an example which will hide cracks and imperfections in the treads.

Amazon.com: KOOTETA Stair Treads for Wooden Steps Indoor, 15 Pack 8" X 30" Non Slip Carpet Stair Treads with Reusable Adhesive for Kids Elders and Dogs, Surface Polyester TPR Backing Stair Runner Rugs, Dark Grey : Tools & Home Improvement

If you want something that covers the tread and riser, you can find stair runners which can be stapled / held in place with a stair runner rod . . . we have used this on 1800 homes but it is another option to consider



Search Results for carpet runner at The Home Depot

As Ryan said, band-aid fixes are just that, temporary in nature and likely to get worse requiring more work in the future.  The unfirtunate aspect is that the tile work will need to be removed - at least up enough to get the lip of the old tub free and removed.  

You might see if you can find a tradesperson that can remove just enough tile to get the tub out and then replace it with either the tile you used (not likely to match) or another color / style to give an accent along the bottom.  

When we use tile in a property that will be a rental (not or first choice), we stick with plain tiles and usually pick up some extras that can be stashed in the property in the event we need replacements - we have had a tenant find a way to crack a tile in the shower wall so having that option to remove the damaged tile and replace it is a plus.

Good luck but you really need to look for the replacement options and not kick the leak down the road and find a bigger issue at that time.

Jon

What is the ft2 of the house . . . to have a new roof put on (and include decking from what you said) with permits in CA, the estimate you have seems low - we pay more here in NE Pennsylvania.  

The $7000 estimate for HVAC may be a tad low depending on the size of the house and size of the unit you are installing.  Once you have the ft2, call a few HVAC people and get a ballpark . . . again, we paid $9,000 for one in an 1800 ft2 house a few months back here.  

The garage conversion could be a can of worms . . . can always add that to the offer as a contingency to verify that the conversion was permitted.  

As far as flooring, what do comps in the area have for flooring?  We usually use LVP or actual hardwood for higher finish homes . . . not sure what $482K buys in your area and the finishes it demands (around here that would get you a 4,000 ft2 on an acre lakefront lot). 

Again, check the buying and selling costs . . . we closed on a $210K house yesterday and our closing costs with just the buyers agent commission were just over $10,400.  

As far as bids, realize that GCs need to make money so spending time giving estimates on the hope you buy the property and then use them is often a non-starter.  Get ballparks from them and when you buy a property and the GC you use does a good job, stick with him on future jobs - we have found we get bumped up when we need him.  

Finally, yup, permitting can suck and you really have to keep your cool which is extremely difficult at times dealing with some of the people in power.

A few points to reflect on . . . 

1) How old is the property?  

2) How old is the roof? Does it need to be replaced?  How old are the utilities (electrical, plumbing, HVAC)?

3) Was the previous work permitted (enclosing the garage and making it living space)?

4) Several areas are low estimates (landscaping, windows (we have spent more than that for 3 windows installed), flooring (looks shot), insulation ($400 is nothing), $800 for a carpenter (not sure how much you need done by that is not much work

5) Not sure I would rip out the kitchen with the granite counters, back splash and the cabinets.  I would look at refacing rather than replacing.

6) Purchase costs - $2011 seems really low - no agent? Check these costs with a title company. Same for Sales costs of $1,500 . . . 

7) Misc or contingency is low as $2,500 will be eaten up in a flash . . . hope for the best and plan for the worst is a rule to live by

8) You have a GC listed . . . have you touched base with one (or three) to get their input based on your local market?

9) The 3 month holding time is unrealistic.  This needs to include reno, listing, contract and reaching the closing table.  Permits can kill your timeline - we have been on hold on a project for 4 weeks this Friday waiting on a permit.

Good luck in your flip . . . remember, you make your money on the buy so be sure you do not underestimate reno costs and find yourself underwater.

I know this will probably generate some heated responses but our experience in more than 20 years of buying & selling is that the vast majority of home inspectors add little to the deal and in many cases derail them especially when there is a newbie involved.  Home inspectors can get training and canned software for reports online from multiple sources.  Ever wonder how they can produce a 60+ page report within an hour after leaving a property?

What we do is contact trades people we have come to depend on for repairs such as HVAC, plumbing, roofing and electrical.  If we look at a property, we can see most of what is required.  If we have questions on the big ticket areas, we call the professionals who know if we buy it they will get the work.  If you look at inspection reports, they always say "Recommend contacted a licensed professional for an assessment" . . . . so why not go to that source initially and if you have done work with them, their assessment is usually free.

Some people have said getting an inspection done when you sell the property which you can give to the buyer is an option but often they will still get their own done . . . 

One perspective that has worked for us

Most of the properties we have purchased in the past few years have come off the MLS. There are deals out there often due to a poor listing by an agent that should probably be flipping burgers, properties that are a cosmetic train wreck and the photos are no plus or priced too high. Like an off market property, see what the spread between buy and sell is and make an offer - the worst thing they can say is no. We recently found an MLS property that was a bank property and the listing was terrible. My wife has no problem offering a low ball offer and in this case it was accepted - looks like a minimum of $75K left at the closing table when we sell. It had been on the MLS for over 45 days and we did wonder why it had not been snapped up. The deals are there - use the tools here on BP and work a few deals to see what to offer.