All Forum Posts by: Andy Sabisch

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.

Have you set a budget to track your return by?  The programs you are planning in using cost money and with the advent of AI and scores of others using the same tools, you will not be blazing a trail but rather following one already trod by many before or ahead of you.

In talking to fellow investors, trying to be the jack of all trades (find deals, renovate deals, sell deal or rent deals) often results in the old saying, Jack of all trades but the master of none.

Is your goal to find deals to wholesale to others, flip or turn into rentals?  Is your time or that or your team better spent focusing on one area or is it large enough to be able to give 110% to all aspects.

Remember, the products you are looking at are well used and often by those long distance which means they are looking in your area . . . we have looked into some of these tools and could not justify the cost versus the competition using the same tools often by virtual assistants working for a few dollars / hour.  We have found a select group of wholesalers that can bring us solid deals which lets us focus on the work to get the property rented or resold.

The question I would ask (or determine) is what is the condition of the siding that is on there now.  Are there gaps, cracked wood, openings that are allowing wind and moisture to come into the house?  Wrapping the house is what we tend to use as long as the siding is not in really bad shape.  I would ask the siding guy if he will address cracks / gaps before he puts paper or foam board up and then the new siding?  Is this going to be a rental or a flip?  Not saying to go cheap for a flip but as long as the surface is prepped and then the wrap put on correctly, you should have a fairly energy efficient home especially if there is any insulation in the walls.

For cosmetics and a roof the $60K seems high and the timeline fairly long.  Does that include closing, doing the work, list, getting under contract and then closing?

Make sure the numbers work when you factor in the carrying costs for the loan, utilities, etc. With the higher interest rates, that has been the downfall for a number of investors when the costs exceeded their budgets. A solid HML will factor the costs in to make sure you and they are covered . . . if the company you are talking do is not doing that, consider looking elsewhere.

Not sure what bringing in a partner will do unless you are using that to eliminate the need for a HML.

As far as comps, how long were they on the market and were there price drops.  Make sure you factor that into your holding period as higher interest rates will kill profits in a heartbeat.

Good luck - just make sure the numbers work and remember, you make the money on the buy not the sell.

If you want some more focused responses, how about sharing the MLS link so we can look at the listing, see the pictures, look at comps and give you better feedback? At times suggestions here that are general in nature tend to get responses that are regional specific which may or may not help you.

We are in a prime buying time before kids go back to school so time is of the essence.

Let us have more details on the property so we can give you specifics rather than generalities.  Overpriced is often the reason however.

Kevin brings up a good point.  As I mentioned earlier, simply winning the auction may not clear all the liens against the property and you may find out that what you won it for is a fraction of what is owed.  The auction company should be able to answer that for you.  Also give the tax collector for the county a call and see if they have additional money owed that are not being cleared.  Last thing you want to do is get a great deal and then find out there is another $100K in debt you had not expected.