All Forum Posts by: Ben Morrison

Greg,

Thanks for the feedback. I just always wondered how they would finance those projects, that makes sense though.

Hey BP,

First, let's clear the air here. I fully understand "Fixer Upper" and other similar shows are for entertainment purposes and do not fully show the details of a REI business.

Now that that's out of the way, how would you think similar companies are structuring these deals? They have a home buyer that can spend up to $250k (or some number), but are purchasing homes for say $150k and putting $100k of repairs into them. How would this type of deal work in the real world?

My inexperienced thoughts on the subject - Buyer is obtaining a preapproval letter from a bank. "Fixer Upper Inc" is then finding a property with an ARV that meets or exceeds that value. They purchase through their own means (cash, private investor, HML) and perform the rehab. After rehab is done, they then have the home appraised and hope it appraises for at or above the ARV estimate and buyer can then purchase the home for the aforementioned total budget ($250k in this case) through traditional financing (mortgage).

Is this what you'd expect is happening on these deals? 

@Nicholas Wallraff thanks for the input! You believe sanding and skim coating was faster and/or less expensive than tearing out the highly textured walls and starting fresh?

David, Thanks for the feedback. I've heard of people sanding the texture down, but I thought that was normally just to remove the knockdown texture, this is a lot more texture than I've seen with normal knockdown, but might be the sort of thing to just try a section and see how doable it is. That's the same reason I'm concerned about using drywall compound or similar to try and level it. I agree though, I'd rather not tear down to studs if at all possible for cost and timeline. And trust me, I'm in it and it's hard to tell if it's a deal or not. A few variables that could drive the cost up and knock it out of worthwhile for us, trying to get those items ironed out before purchasing to have a little more confidence.

Whitney, we are in Iowa, nowhere near OC/LA!

Hello BP group,

Looking at buying a house to rehab and flip and have a question for you experts. Currently, it is a ranch home that has a basement with only exterior access. It would technically be a walkout basement, but it's probably only ~6 feet tall. All the mechanical is in the basement (electrical panel, furnace, water heater). As part of the reno, I'm leaning toward adding a set of stairs inside the home to reach the basement from inside - seems very odd to me to have to go outside and around to access primary mechanicals. No quote from a contractor yet, but expect this to cost around $2k, total reno cost looking around $30k right now. Does this seem like a worthwhile reno to you?

Secondly, the walls in this home have texture on them like I've never seen. I'm talking peaks of probably an inch? I don't have it in the budget currently to tear out and replace all of that, but we would be reworking the floor plan and adding some walls (while removing others). It seems to me this amount of texture would be too much to skim coat and I'd be concerned with adding 1/4" sheetrock in that it wouldn't sit very flush over this extreme texture. Anyone experienced something similar? Thoughts or options here? Home is about 1100 sf.

Thanks!