All Forum Posts by: Don Gouge

The money is in selling to a aspiring flipper. Too many people with access to cash watching TV shows.

Obviously planning for about one month of missed rent every five years. Where are the management fees? You have to calculate them even if you self manage. The reality of this deal is that it will probably be negative $500 a month even after you brought 76k to the closing table.

Maybe I am missing something here but you purchased a property that was 50k under appraisal and invested 30k in it and sold it for 69k more than you paid for it. Were you the listing and selling agent both? How much did the hard money cost you? If the appraisal was correct , you lost at least 11k by doing the remodel as opposed to selling if for the initial appraisal value.

I have done it all from sitting up the transit and driving the grade pegs to caulking the finished trim. Ask away!

   After doing many flips, I realized one day that I was literally throwing money away. Ordinarily we would just gut everything in the house and throw it in the dumpster. It was fast and easy but just increased the dump fees. One day, while looking at the hundredth marble top and faucet headed for the dumpster, I had a wild thought that someone might give a few dollars for this. 

  I had never used these groups much before but I snapped a few pics of vanities and tops, kitchen cabinets, doors, windows, old appliances and even a pile of used lumber from a demolished deck. I posted these to some Facebook buy/sell groups and marketplace. I was stunned with the response! People came immediately and were buying what I posted and some even wanted stuff that I  never thought anyone would want. I sold well over a thousand dollars worth of stuff in a day and a half that was headed to the dump. I have done this several times since. It's not a lot but it's like free cash. Btw, things always sell quicker the first of the month.

Let me run counter to what a few here have said. First,  the house didn't lose money. It was your charity that caused the loss but perhaps it wasnt a loss because you were doing something for others. Say you do sell, what do you plan to do with the proceeds? Can you yield a higher or same return with another investment? If you do sell there is a chance you will have to pay a realtor and pay capital gains tax and these two can take a sizable chunk out your sale proceeds. Perhaps you could sell and do a 1031 exchange to avoid the tax but that puts you back into the landlord game. You do have substantial equity in this home so you could always refi and pay for your upgrades with that money and even put some tax free cash in your pocket.

Too bad you can't see the inside of the house before you spend your money on it. I have absolutely no Idea how you would see the inside of the house.

@Pete Perez  share with us how much your dumpster fees were so we can celebrate your savings!

You can put anything in a contract that you want but getting the seller to sign it is another. In this red hot market, many contracts are being written without an inspection clause. Sellers don't want to tie up their property when the buyer can easily back out. Do your due diligence BEFORE you submit an offer. This way you can submit a contingency free contract and you will move to the top of the list.

Jack Martin had an excellent reply to the question and about the only thing I can add is two items. Do not put any value in empty spaces. Bringing on mobile homes can be very expensive and financing isnt always available for this investment. Along the same lines, you have to look at the ability of each individual lot to continue to produce income. The ability to do this is directly related to the age and quality of the mobile home located on it whether the home is park owned or not. Even if the lot rent numbers are the same, a park filled with 20 year old homes will ultimately be more valuable than a park filled with 40 year old homes.