All Forum Posts by: Chris C.

Starting my mailing campaign and wondering what handwriting font people are using. I will probably contract out my larger mailings but some of my smaller more targeted mailings I will do myself. 

My agent agreed to a 1% reduction on the selling fee so I have countered my max offer at $115100.

The bank countered my offer yesterday with full list price and the listing agent let me know other offers are coming in.  I am going to check with my agent and see if she will give me a discount on the selling fees since she is getting both the buying and selling fees.  Waiting to hear back from her before submitting my best offer.

The home was re-listed Thursday at $119,500.  I put an offer in that night for $110,000 no inspection period.  We have not heard back yet but my offer expires Monday night.

@Larry Turowski I guess that is kind of an amusing statement showing a "rough" estimate rounded to the dollar.  I have not gotten my final quotes in from my contractors so the numbers I have so far are my estimates based on my past rehabs.  My final budget will be based off the quotes I get.

@Debra Leeson I won't be getting 3 quotes on every scope of work.  I have a full time job while also running my rentals and flipping.  I just can't find and meet with three contractors for every trade on every home.  I look for guys who are what Dave Ramsey would call Teachers at Heart.  If they take their time going through a home teaching me their trade then I know they are proud of their work.

I have a painter and handyman I have used on my past rehabs that are reasonably priced and do good work.  As long as they continue to do good work and don't get crazy with their pricing I will continue to use them.    We have worked together to create some great homes so far.

Both of these come in and quote the job immediately after I get the inspection done and build my SOW's.  That way they now the job is coming and are ready to start the day I close.  So far their prices have been in line with what I expect so they keep getting awarded the job.  The only negative to my painter is that he is a one man operation and slow.  I have tolerated this so far because he is so good and makes a house look great. He is moving back to New York in the spring so I will try to find a crew to replace him at that time.

I had a flooring contractor who had the same status but he just could not and would not maintain the level of quality control I expect.  My last flip was the last time he will be used.

I have spoken with two new flooring contractors.  

One had called me after seeing my name posted to the door of my last flip asking me to allow him to quote my next job.  We set up an appointment and he was 30 minutes late. Strike one.  I still allowed him to measure the home so I could see what his quote would come back as and he still has not sent it to me.  Strike two.  He also was a retail minded contractor.  He didn't understand the rehabber/builder mindset of a balance between quality and cost.  He kept constantly wanting to up sale me to whatever the special of the day is.  Strike three.

The second flooring contractor was highly recommended by the local REIA. I spoke with him on the phone and we had a great conversation. I scheduled the meeting but the deal feel apart. I called him and canceled so I would not waste his time. If he shows up on time to our next meeting and can get his prices where I expect then he will be awarded the job.

I have an HVAC contractor I have been using for about a year on my rental properties. He does good work and his prices are fair.  He will get a chance to quote the HVAC on this home but I will probably get at least a second quote to keep him honest.

I do not have a licensed Electrician or Plumber yet as I have not needed them so far.

My handyman has installed counter tops on my past flips using standard tops from Lowe's. The tops in this home are fairly complicated and not available from Lowe's.  I have searched for a laminate counter top installer and it appears there is only one guy left.  I had him quote the job and he came back at $1760.  That is the kitchen and all 3 bathrooms.  We have decided not to change the counter tops in the laundry room.  When my handyman found out who I had quote it he highly recommended him and said that is who he uses for his complex jobs.  Which makes sense because I could not find anyone else who builds and installs locally.

If I get the home back under contract or if I have time later in the week I will post all my SOW's and the bids I have so far.

@Kevin D. That is actually a laundry room/butlers pantry.  We will be keeping it as the pass through seems to be a nice feature.

Okay if you stuck it out this long thanks.  It really seems to help me think of things differently when I have to answer questions and put them to "paper" like this.

Okay looks like we are going to sink.

Inspection came back with nothing out of the ordinary except the HVAC.  Looks like it will need some duct work and probably a new gas pack.  Asked the bank for a price reduction and was flat out denied with no counter.  Listing agent said he is working with one of the most stubborn asset managers he has ever dealt with.  Going to let it go back on the market and I will try to get it at a more feasible price.  

Sorry this could not be a diary of a rehab but maybe some of you got a little something from it.  If I am able to get it back under contract I will continue this post.   Just another day in the life of a flipper.

@Mike Hurney It is a single but it does look like it is broken into 4's from the front.

Yea don't know if anyone else has done one truly live before but sink or swim hope you guys enjoy the show.

Thought I would throw in a little detail about how I fund deals and specifically this one.

I try and fund my own deals but right now I am sitting on a 1000 sf 3/1 next to a busy road that I can't move. Very good lesson in the importance of location.

A co-worker has been investing with me since I begin picking up rental properties and flipping mobile homes. He has now jumped on board with the rehabbing also.

We structure our deals on a promissory note that is not recorded against the property. We do this for a couple of reasons.

• It saves a little money at closing when we do not have to file a lien/mortgage. It saves even more when we use the selling banks attorney so that they pay attorney and title insurance fees.
• Another benefit is that he does not have to attend any of the closings which is going to be necessary since he leaves in a few months for a long term contract in Germany.
• We do not have to pay him the full amount owed at the sell closing. We do a profit split but there are always some insurance andutility bills that come in after closing. We now pay him his principal right after closing. We then pay the remaining balance once all bills etc are accounted for.

It obviously takes a lot of trust for us to structure a deal in this way. He does have recourse but not as secure or clean cut as having a lien.

The profit split is 60/40. I get 60% and all capitol investors get the 40% based on their percentage of total funding. If a deal cost $100k and an investor puts in $80k and I put in $20k then the 40% of profit gets split 80/20. This is more expensive then borrowing from a bank but the flexibility is worth it.

On this particular deal I am also talking with a friend of his that is interested in investing with us. She has some reservations so we are working to make her comfortable which has required a few changes to the contract. Her father is an attorney so his input has actually been helpful.

@Nancy Roth Thanks for the feedback Nancy.  I am updating the counter tops and repainting all the cabinets.  The line item in my budget is for standard off the shelf counter-tops my handyman installs from Lowes.  Due to the more complicated countertops in this home and the multiple bathroom counter-tops we are having a counter-top company do all the counter-tops.   The additional materials line item is mostly counter-tops.

@Sylvia B. The pass through is actually to the laundry room that is also configured like a butlers pantry with sink and serving area.  This is in the basement family room and not in the main family room upstairs.

Here is a picture of the "ductless" return.  What you see in the wall is actually the back of a fiberglass tub.

Apparently I was a bit quick to start this thread but it works out in the end.   

I would love to hear other peoples experience with incompetent listing agents and how you have handled problems with them or reported them to the banks they represent.

When I started this thread I had just got confirmation that the bank had accepted my offer and was just waiting on the contract for me to sign.  Upon receiving the contract the sales price was for $122000.  We sent it back and the listing agent told us that he had submitted our offer at $122000 by accident.  $122000 was never offered by either party so how this came to be I am not sure.  He assures us it will not be a problem and he goes back to the bank.  They counter again at $121000 on Friday.  I tell them my original offer still stands.  They contact me on Saturday (who was working at a bank on Saturday) and agree to price but wanted to drop my inspection period from 7 days to 5 days.  I had already scheduled my inspector for Tuesday so this was fine and I accepted.  On Monday I receive the contract but they had changed closing from October 24th to the 20th.  By this time it is late Monday so I cancel my inspector and tell him I will let him know when I get it sorted.  I send the contract back and the listing agent responds to just strike through it and change the closing date.  We do this only to have him tell us the bank will not accept a contract with strike throughs.  We wait on another contract and sign it Monday night.  We do not get a ratified contract from them until today at 1.  That is after I told them that I was rescinding my offer at 5 today.  Guess what day they dated it. Tuesday the 7th.  

Now I have 5 days to get my inspection and my inspector can't get there until Monday night.  To increase my inspection time I will be requesting a price reduction for $10,000 for the duct work issue.  This will not only give me 3 more days it will also allow me to aggravate them a little and negotiate in case we find anything unexpected.

@Huy N. The HVAC system is interesting.  Outside is a gas pack and a heat pump as seen in the pictures.  The gas pack has ducts that run through the ceiling downstairs and the floor upstairs.  The heat pump is ducted in the ceiling of the upstairs.  Where the gas pack return enters the house is behind the downstairs bath tub.  A return is cut in the interior wall also accessing this space behind the bathtub with a return grill and filter.  So the area behind the tube is a large vacant area  where the air is pulled from.  No duct work.  I will try to take a picture next time I am over there.

Here is a preliminary budget that I will keep updated.