All Forum Posts by: Dell Schlabach

We have a business model where we buy mostly 75%+ bank owned houses, those we rehab 15+ a year, and we sell average of three a month to other rehabbers who run a rehab model similar to ours. For the bank owned houses, we so do simultaneous closing, he non bank ones we assign whenever feasable to keep costs to a minimum. 

We just started in the Fla market, and last week got a contract in our first Fla rehab. Have one closed in the buy side and two more under contract. I am licensed in Ohio but not yet in Fla.

Some of our buyers want to do some rehabs down here.... Just trying to clarify some of the nuiances. 

So the logic goes something like, although you are not representing either party, buyer or seller and you have no fiduciary responsibility to them. 

If you are assigning quite a few they would consider that you are selling "for another" even though you are not representing "another". 

I have seen plenty of bad operators in the last 15 years, and understand what they are trying to prevent. 

The idea that it was not legal for me to assign a contract on a property before I had my license, but now that I have my license it is legal, seems illogical.

You mentioned that it's legal for me to represent others as an agent. In my assignments before I was licensed as well as after I was licensed, I did not and do not represent either the buyer or the seller. I represent myself.

So I have a hard time seeing how  being an agent who does not represent the buyer or the seller, all of a sudden it is legal, thoughts?

Or is it that assigning is not illegeal, but the advertising of a property that you don't own is illegeal? 

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Interesting question I just thought of they didn't address in real estate classes. 

As a licensed agent it is legal assign a contract, but not legal as an unlicenced individual? 

Florida? Ohio?

Im interested, right in my back yard, but I'm out of town all next week, let me know if this one gets postponed or if you decide to do another one. 

Sounds like someone is stalling for another reason, I would try and find out why. There were a few changes to the Ohio Good Funds Law but the only one that has made a real difference to us is that anything over 1000 has to be wired. No more cashier checks to the title company. 

Wires can be done same day. No week delays required. 

I am not a licensed realtor, but we wholesale quite a few houses. 

We buy 90% of our house from the MLS. We rehab about half of them, the rest we wholesale to other rehabbers.

I have done multiple partnerships with contractors and have a couple partnerships right now.

Important questions; what is the purpose, is it to scale the business?

Would he only be working with you so you can go from two or three houses per year to 12 or more? 

Is he expecting to get paid for work or does he only get a profit split?

Will he be doing some, none or most of the work? 

I'm in the process of setting up a partnership in the St Pete , Clearwater area with a  contractor from Sarasota. The objective being to partner and rehab full time in  Pinellas and Sarasota Counties. 

So the answer in my opinion is, It depends on a lot of variables. I have had partnership that didn't work and have some that work well too. 

We are probably in a similar market to yours with similar price points. 

Most of our houses sell 150-250 and take an average of six weeks to rehab. 

We always have a few rehabs in the loop to keep the machine running without any downtime.

For profits, we calculate all our rehab projections, taxes, insurance, utilities all holding closing and selling costs as well as  interest on a six month hold period then we add in 20k for profit subtract from sell price and that's the max we will pay for a house. Or in other words we will buy our typical 6wk rehab if we can make 20k, subcontracting out all the work. 

If  a project to take twice as long we will increase our profit number, likewise if the we can paint and carpet in a few weeks I may drop profits number to 15k.  

We do have multiple projects running concurrently. 

We also wholesale houses to a number of other rehabbers. Most are looking for 15k minimum,a couple of the guys do all their own work and they want 25-40 but buy price is about the same as their costs are a lot lower then mine but they are on a project twice as long as we are. So there are aot of variable.

If you are looking to make 50k on a 150k retail deal in our area, you won't get many deals unless you do direct marketing and are a helluva negotiator. Because there are a 50 guys that will do the deal for a smaller margin. 

If you buy for 750,000 put 500,000 in it and takes a year to do a deal, 50k is a pretty crappy return. 

So is 50,000 profit a doable rehab number, yes. Is it worth it, depends on a lot of variables. 

These are the fundamentals you reccomend to everyone who wants to invest in real estate?

 Curious what you expect him to learn from calling 29 investors? 

Is that how you learned the business got great insights? 

It's been said that if you ask more then three people for advise on a subject you will just get confused. What are your thoughts about that.