All Forum Posts by: Andy Sabisch

As Matthew said, anyone that buys from a wholesaler without verifying the reno costs and the ARV is asking to be taken . . . . as the saying goes "Trust but verify". I do think that a wholesaler that will do well has to have a feel for both numbers otherwise they are wasting everyone's time tying up the property.

Not sure where you are in terms of getting into the game but while paying a contractor to look at a property is an option, unless you have it locked up it will cost you for him / her to come by and "teach" you what they see and the costs.  It would be better to try to connect with someone in the REIG that can walk you through some of their properties . . . even if it costs you a nice dinner it will be a cheap lesson.

Mitch is spot on in terms of getting a realistic repair estimate (and don't forget to add a contingency because no matter how much experience you have there will always be something that comes up unexpected and adds time and cost) is key. 

Contractors are stretched nowadays especially the good ones.  Very few will walk a property down with you before you have it under contract.  You can write the contract that it is contingent on an inspection with a contractor and use his input to make or break the deal but you need to be in the ballpark when you start.  I am not talking about a home inspection which usually says "get a professional opinion" which is what you should have gotten to start with.

The other option is to join a local REIG and see if you can walk a few properties with members that are doing them and compare notes.  They can show you how to come up with a repair estimate for your area (which can vary from other areas)

Good luck in your journey

Scripts can be a double-edged sword.  Read, they come across as a telemarketer.  Use them as a guide and let the conversation flow naturally and you stand a better chance of striking up a conversation that can at least lead to a more in-depth discussion.  If you are going to wholesale the property, try not to blow smoke and say you need to have your partner come look at the property before closing - you are wasting the seller's time and many have been burned that way.  We get calls all the time from people that claim to be investors wanting to buy one of our properties (including some we sold more than a year ago - shows how accurate some of the pay lists actually are) and when pressed, it is clear they are fishing for deals to wholesale without having buyers lined up.  In several cases I have spent time educating them on lists, calls and the need to have buyers ready. 

Your script or simply guidelines for starting a call should be geared to solving a problem the seller may have . . . needs to sell, may want to sell but had not considered the options, etc.

Best advice is to be honest with yourself as to what you are looking for - a flip, a buy-&-hold, a wholesale - and approach the seller with a sincere opening explaining who you are what you are bringing to the table.  I would be happy to share our script but we tailor the call to the opportunity.

It sounds like you have a contractor that either is in over his head (skill wise or help wise) if money is not the issue.  Have you discussed the reason he is planning on exiting stage left?  There may be a valid reason that both of you can work around.

If not, legal action is often the route that costs you more and gets you nothing.  What are you going to take him to court over?  He has not taken your money so there is no loss there.  He may have an explanation that you did not explore (see above) that the judge agrees with and tosses your case.  More than likely, you will be out the time, the court costs, any lawyer expense and come away with at best a judgement that will costs you more money to collect.

The best route is to talk to the GC and if you cant find common ground, part ways and find one that will in fact finish the work.  And yes, most GCs will charge more to finish half done jobs as they will be responsible for the final product and do not know how what you have was done.

Quote from @Travis Andres:

Quote from @Andy Sabisch:

We have been happy with Steadily Insurance Company - they deal nationally with investor properties . .  www.Steadily.com

Thanks for this Andy, yeah I tried them and actually they were about $1000 more expensive than Obie Insurance. 

Interesting - might be market dependent.  I just ran a quote on of our properties it was about $1,000 more with Obie.

As Bill said, you really need to be wary about a half-done flip.  What was done without permits, what was done haphazardly, what is behind walls or unseen that can cause you issues later.  Things happen but often cash strapped flippers cut corners and :"put lipstick on a pig" to get out from under a mistake.  Paneling is easy to pull and in this case trying to match is a non-starter.  If we need to leave paneling we usually hit it with a coat of bonding primer and paint it.  Remember on a flip, it is not what you like but what the buyer pool likes . . . made those mistakes early on and you learn that you do what the masses will want.

We have been happy with Steadily Insurance Company - they deal nationally with investor properties . .  www.Steadily.com

Hate to hear that but investing remotely is ripe with stories like yours.  Without a crew on the ground, relying on recommendations from people you don't know is always risky. 

What we have found that the legal route is often a way to waste more money and not get what you thought.  If you get a judgement you need to collect. In many areas that is like getting blood from a stone and involved more legal fees  if the contractor burned you it is probably not the first time.  We tool a contractor to court in TN on a property and he didn't show so the jusgement went to us. I asked the clerk if it was common for the contractor to not show up and her response was...most have outstanding warrants and leins and won't come near the courthouse.

Not sure what you are out but it might be better to limit your losses and eat the money.  Lesson, never pay in advance and get someone independent to inspect before dispersing funds.

The problem with sites like Zillow and Realtor is that even if you take it off the market for 30 days and it shows as a new listing, buyers can see the price history from when you bought it to when you listed it and dropped the prices . . . that "trick" worked before the history was public so not sure that is the solution. 

If you have had as many showings as you did, your agent should have followed up with each one and seen what the feedback was to help you make adjustments rather than dropping the price and still see no offers.  If this has not been provided, I would be looking at a different agent (or even going flat fee and saving yourself the 3% listing agent fee which you could apply to the sale and still not be any further behind).

How did the open house work out?  Did you get any interest or feedback from local buyers to help you determine a path forward?