All Forum Posts by: Ben Valentin

@Bob Okenwa Thanks for all the pointers! I definitely want to keep learning how to do my own rehab estimates. I'll be studying hard!

@Sarah D. I didn't get a chance to have my own contractor look at this property, so all of these numbers are given by the wholesale team and their realtors // contractors. Of course it would have needed to be verified before jumping in. 

This property sold to an investor all in less than 24 hours from when it was sent out on the buyers list.

@Dallas Trufyn Below are the comps that were listed from the wholesaler, all within a half mile.

Address             //              Bed/Bath/SF   //    Age    //    Date Sold      //      Price

1

741 South Pennsylvania Avenue

2/2/ 1921

2008

Dec-06-2016

$ 650,000

2

735 McIntyre Avenue

4/3/ 2340

1941

Apr-28-2016

$ 605,000

3

391 Vitoria Avenue

3/3 /2279

1925

Jul-29-2016

$ 595,000

Subject Property

2/1/ 936 (1,936)

1941

$ 312,000

@Daniel Baker Thanks for the pointers! I'll definitely take that into consideration - Great advice!

@Dallas Trufyn & @Bob Okenwa The contractors estimate was built with the plan to add a 3rd bedroom and a 2nd bathroom adding an additional thousand square feet from 936 to 1936 at a 3/2 property. Do you believe $580 might be more believable at that point?

@J.R. Gutierrez that's great info! I've heard it's important to get 3 separate bids from separate contractors to be sure about the budget -- Is it appropriate to call three contractors and have them all meet at the property for a walk through at the same time? (Of course, this is until I build a better relationship with a contractor)

Originally posted by @J.R. Gutierrez:

Hey @Ben Valentin

From a rehab perspective, I would strongly suggest walking the unit and maybe even getting an inspection to see what the rehab costs are actually going to be. You never know what's hiding beyond the surface. What condition is the electrical in? It is an older home so are you going to have to rewire the entire house to bring it up to code? Maybe even install a new panel? That could cost as much as $20K. $115,000 for renovations sounds like a sufficient amount, but without details of the renovations it's hard to confirm. If the numbers are correct then you have a great deal on your hands.

Thanks for the comments! Estimating rehabs are my weak spot -- do you have any suggestions for getting these numbers verified? How much would it cost to get a professional to come in and get legitimate numbers for me? Also, when it comes to these wholesale deals, they go very quickly. Is there a way to have an inspector on standby so I can have them check out the property quickly so that I can throw down the earnest money deposit before anyone else?

Thanks again!

The financial partner I'm working with may not be able to put up this much capital, but a wholesaler I've been working with sent me this deal this morning to take a look at. I've looked at the numbers thousand times and it looks like an incredible deal, so I figured I would post it here to see if anyone thinks I'm missing something.

These are just numbers shown by the wholesaler -- He says all comps and estimates have been vetted with their contractors and realtors, but I have not physically looked at the property or verified these numbers for myself. 

This home is in Winter Park, FL

***The comparable homes below may differ in year built, but this home will be a newer home after renovations, and addition of square footage. The older comparable properties sold at a high price, even being built in the 1920's*****

BEDS : 2

YEAR BUILT : 1941

BATHS : 1

POOL : No

SQ. FT. : 936

TAXES : $ 3,328

REHAB SUMMARY

Interior Paint
Exterior Paint
Replace Roof
Misc. Cosmetics
Landscaping
Flooring
Appliances
Replace Air Handler
Replace Air Conditioner
Update Kitchen
Update Bathroom
Repair Plumbing
Electrical
Add Additional Square Footage
Add Extra Bedroom
Add Extra Bathroom

TOTAL REHAB: $ 115,000

INVESTMENT ANALYSIS :

$ 312,000	Purchase Price
$ 9,360	Closing Costs 1st (Est. 3%)
$ 115,000	Estimated Renovation Cost
$ 436,360	Total Acquisition Cost
$ 580,000	Projected ARV
$ 8,700	Closing Costs 2nd (Est. 1.5%)
$ 23,200	Less Commissions (Est. 4%)
$ 31,900	Holding Expenses (2nd Side)
$ 468,260	Total Expenses
$ 111,740	Net Profit
24 %	ROI

Let me know if I'm missing anything. To me it seems that I have $111,000 worth of mistakes to make before I lose money, which seems like a lot of margin for error. I could be wrong though, and this could be a terrible deal. 

@JD Martin I wasn't aware of the retainer - that's great info! I appreciate that! Do you know if there's somewhere I can find a sample contract with all of these details laid out for me to take a look at? I do well with visual examples to learn from. I'm confused a bit with putting together a scope of work and how to get the proper contracts drawn up. 

Thanks again!

Jeffrey Hotz That would be great! I'm in the Orlando market. Shoot me a PM with the info, I'd love to connect up!

Jeffrey Stasz Great info! I'll be looking into all of that, thanks!

So I remember in the podcasts a few guests talking about learning the hard way when dealing with contractors. Losing money, dealing with mechanics liens, etc. They all mentioned that the more signed documents you collect before the project begins, the safer you are in the long run. 

Does anyone know where or how to find these types of documents to have on hand when picking my contractor? And exactly what documents I should have? Do I need to get an attorney, or is there a simple template I can print off the internet? 

Also, does anyone have experience with contractors giving you a hard time signing these - If that comes up, how should I handle the contractor? 

I'd like to have this all prepared before going into my first deal. 

Thanks!