All Forum Posts by: Brandon Halley

 @Lisa Mason Hey Lisa that sounds fun to get together and talk about flips. I work primarily downtown and fairly flexible so feel free to reach out when you get to town.

Also, yea i still use @Jeff Reynolds. He used to do a lot of flips himself and has a unique and valuable perspective I have not found in other realtors. Highly recommend!

@Michael Lile mote Hey man welcome to BP! I am an active REI investor in Durango and La Plata County. I also own a construction company and am always happy to help folks out in anyway I can. Feel free to use me as a resource for any questions regarding local building, zoning, estimates and anything construction related. I am always looking at ways to maximize the value of real estate in the area and know the ins and outs extensively.

I also believe in the abundance mentality and finding that in common within this community is one of my favorite aspects! Energy and creativity is an unlimited resource and thus infinite ways to improve this place we call home.

@Christine Heartsill

Hey Christine sorry for the late response. If you are still coming to town soon there is a MeetUp here every 4th Monday of the month. It focuses on multifamily investing, but is also a great way to network with investors of all types. I personally am a contractor and do mostly flips - sounds like we should meet if you move to town! After 12 years here I have a great network of reliable tradespeople in the area and happy to share my local knowledge. 

Welcome Tony,

I agree this town is lacking a quality property manager- go for it!

Hey welcome to town. My whole family lives here we are from Milwaukee as well! Cash flow in Durango is tough for sure but there are opportunities out there. I have made a few work w some creativity and a value add of some sort. ADU's, mobile homes, distressed properties to name a few. Mostly I do flips, and am also a local contractor as well. Def reach out if you need anything real estate, construction or otherwise.

Hey Trevor thanks for the introduction. Welcome to BP! I am an active REI in Durango doing mostly flips which has been a great way to leverage my skills as a carpenter and allowed me to get involved in real estate and learn a ton hands on. I started out the same way by learning everything I could and slowly but surely it has become a full time career! The most common advice I see out here and I will say it again is if you make the commitment stick to it! It can seem a slow process at first but the more experience and knowledge you have the more opportunities will start to present themselves. The mindset/community is also very important and Durango can sometimes be challenging so let me know if you need anything I'm glad to help!

-Brandon

@Morgan Klein Over the past few months I had been talking to multiple investors who were capable of pulling something like this off and I made sure they all knew my track record from previous projects, in advance. For every deal I do I actually make a hot sheet for the deal that includes projections, estimates, and actuals for both rehab and time frame. So far my records indicate that I consistently underestimate the rehab, and consistently sell for more than anticipated and am fairly accurate at timeframe. This is not because I am bad at estimates, but more so because I generally refine the project as a go and find more ways to value add. I admit I have a hard time doing the quick and dirty job but it helps me sleep at night and my houses so far have sold quickly. This data also shows that I am conservative in my ARV. I like to position myself to where worst case scenario everyone gets paid and I make wages. Most likely I will make a bit more. And there is always a chance for a home run.

The main confidence other than a clean track record is that when I offer an investor a 1st lien position for a house that is about equal to the value of his loan even before repair, and they know I am going to be increasing the value from day 1 with money out of my own pocket it creates a fairly strong equity position for them. I purposely put all the risk on me.

I forget what podcast it was but I utilize a strategy I heard where I wait to make the pitch directly. I generally call the investor and say I want them to take a look at a project and get there opinion/advice on it. I like them to reach there own conclusions on the place and so far it works like a charm.

Glad to hear you have a similar project going on. Let me know if you have any questions come up on the remodel.

Just in case you stumble across this and are wondering if its worth a read, I want to be clear as to my goal of this flip diary and perspective within. My main skill that I leverage is by far my carpenter/contractor experience. This is likely going to be my most successful flip to date and I would like to share it because the value created relies heavily on these skills. Doing a 100k remodel in 3 months, being your own boss, and getting paid 100k+ to do it is quite the experience. It is amazing how motivated I become when there is that much money on the table. It's nothing I could have imagined when I started shoveling holes at age 15. Or even when I built my first house as an assistant carpenter at 20. At age 25 I thought I was living the dream making 25/hour doing filthy remodels 40 hours a week with checks coming into my fancy new LLC. Potential is always beyond scope.

All this ascension I think hinges on a deep belief that I hold of abundance, positivity, and a passion for being a carpenter. Similar to a REI - we value freedom above all. This often times means you gotta turn up the rock n roll, put your head down and get laser focused.

My niche has become finding the houses that are the most messed up. They have the most problems and are the most difficult to solve. Yes, i know this is what many flippers do. However, what most flippers don't do is figure out how to do the remodel in half the time, for half the cost, and with a result twice as good, sell the house at a discount to an ecstatic new homeowner, and pay everyone involved handsomely. A tall order, I know, but if everyone isn't winning then is it really worth it? 

I closed on this house 3 weeks ago and decided to share the process start to end. It was an off market property but there were agents involved. I looked at it with mine and even for a contractor/flipper it seemed a little intimidating. The place was originally built in 1961, had what looked like 4 additions, and multiple remodels. It is 2650sqft plus garage. The neighborhood is more expensive than I have ever dealt with in combination with an ultra strict and pricey HOA (tennis anyone?). Oh yea, it was also covered in mold.

The house was hitting the MLS on friday for 300k. It was thursday afternoon, I was the first to see it. We walked through the house like we always do - brainstorming the new floorplan as we go. We both bring up potential issues, value adds, what to keep, what to leave, levels of finishes for the neighborhood, etc. I ran some rough numbers in my head and in combination with an ARV from my agent I had him write up an offer.

250K cash. 10 day inspection period. No other contingencies. 

The next day the offer was countered as expected. 270k and they would throw in the patio furniture. We have a deal! 

Next step - find some money. Figuring out how to make offers before I had any money lined up was a game changer for me. I know it might sound crazy but finding $320K I think is easier than finding $320. I called up a few of my investors and mentioned to them that I had a project I wanted to show them. One of them was more interested and so I gave him the tour and a proposal for terms. I like to make it easy on these guys. They are done doing any sort of work. He said he thought the house sucked but the lot was a home run. Exactly what I thought. We agreed he would lend me 320K and I would put in the remaining 80k. I have about 70k liquid to my name.

Basic plan.

Purchase 270k

Remodel/Loan/Holding 130k

Sale Price 550K

Closing Cost 35K

Profit 115K

Ok enough talk here are some pics

My favorite tool is the hammer. Stay tuned for demolition.

An 85 sqft bedroom is VERY small and almost below the minimum standard to even be considered a bedroom. Minimum width in any direction of a bedroom is 7'. I'll guess yours is 8'x10.5'. Add the necessary closet and the entry door you are now down to about an 8x8 of floor for a bed. A queen is 5'x6.5'. That leaves an 18" path around 3 sides of the bed. Not a bedroom I would personally feel comfortable in. Add in that it is now sharing a wall to the master bedroom which is generally undesirable and my guess is that it will not add value.