All Forum Posts by: Andy Sabisch

Richard nailed it . . . . looking at what sold 6 months ago is not going to tell you what will sell today or what it will sell for since the market is very fluid at this point.  You need to have a pulse on what the market is doing real time to know if a price and finish of your property is in line with what is selling and what is simply sitting there.  My wife can tell you better than most local agents can as far as what the market is doing which speaks to the quality of many agents today (often little more than door openers on for sale properties).  If you keep up with sales in your area you will know what is selling, how long it is taking and what features are being sought,

Be happy to provide some insight . . . can you share the listing if it is up an MLS?

I think that will generate more specific feedback than generalities otherwise.

As Jeff said, those %ARV formulas may have worked years ago but they really do not work today. The other formula which people look for is how much profit is a deal worth going for. For some people, they need a minimum of $50,000 or more to take on a deal. For us, as long as we are making a profit when factoring our time and expenses into it, I am not up to leaving it on the table.

As you said, ensuring the ARV is accurate and conservative and you have at least 10% contingency in the equation is key to a successful outcome. Ensure you have the holding time conservative as well with the way the market has changed.

Best of luck

Start by taking a look at the calculators on BP - we use them and they give us what we need to pull the trigger or move on.  As far as net on a deal, you will need to figure that out as without knowing your income bracket or what deductions you can apply, that would be a tall order.

As Scott said, looking for a hard and fast number or even a range for renovations from investors across the country is like throwing darts at a board with random numbers on them.  The cost will depend on the labor cost in your area, the permitting required in your area, the finishes the level of house you are doing in your area . . . the common factor is IN YOUR AREA.

The old days where numbers were posted or printed in books is gone as the range makes things so very locality dependent.  Look for a REIG in your area and see what they are paying for the type of properties you are looking at, the finishes you plan to provide (or will need to provide) and what labor costs are.  I know what we pay locally is no where near what someone in CA would pay so my numbers would bear no relevance to an LA investor.

What you are describing is called a Private Money Lender or PML.  Deals use this source all the time typically offering a set return on investment for a specific period of time.  Looking to do it as a partnership and have input into the deal as far as the reno goes will be a turn off to most experienced investors who have a road map that has been proven to work but are in need of funding for part of the deal.

What I was trying to say is you need to see what the cost to get those deals that the wholesalers are also looking at and that is the program costs and the time involved.  If a lead that turns into a buy costs you $10,000 to get, would it be worth paying a wholesaler $8,000 to find you that same deal?  The $10,000 might be low when you factor all the costs into the deal that crosses the closing table but you should at least come up with a rough tracking metric to see what the costs end up being.

If you are getting poor deals from the wholesalers, you might also want to look into different wholesalers .... we went through several and had to educate a few to get where we are and have deals that offer solid returns.  I really do not care what they get it for if the deal works for me and takes none of my time to get it.

As far as the asbestos shingles on it now, be careful with going down the road to remove it.  If you are using a contractor that is certified to remove and dispose it, you will pay a premium for it.  If you are not, you are taking a chance for a city / county inspector to red tag the work.  That happened to us on a property about 8 years ago and it cost us $$$ and almost 1.5 months to get back on track.  As long as the siding is not falling off, simply wrap it and side over it.  We have used this route on several homes in different markets and have had no issues.  As long as asbestos is not disturbed, you can go over it and avoid the costs and hurdles removing it (siding, flooring, tiles, etc.) will bring

I would check to make sure the new hinge is flush with the back of the door and then check if the hinge is flush with the door frame.  They may be an exact match in terms of fitting into the cutout on both the door and the frame but even a slight difference will cause what you are experiencing.  If they are slightly higher, you will need to use a chisel and remove a slight amount from each to make sure they are flush.

Consider posting a photo or two if this is not the issue.