All Forum Posts by: Dustin P.

@Logan Reinard Price fixes everything. What if you could buy the house for $1? $10? $100? $1000? Just gotta look at it from that perspective.

Worst case scenario figure out the value of the dirt, take away cost of scrape, and you should be pretty close to your price.

@Tim Crosby I just paid $1500 to paint a 1575 square foot house. Two tone paint, good cuts, looks really good (This is for a rental). It took him 2 days. He understands that he's my go to painter and that since I work with several investors I can refer him a ton of work. Similar to your Option 'B', small operation, one main guy with 2 helpers. I'm sure he charges a little more retail for home owner clients, and then keeps his 2 guys busy and fills the gap with investor jobs. 

Does your Option B have references? Just because it's a lot lower than Option A does not mean it wouldn't be quality.

Option A sounds absolutely insane to me. He wants to get a few people to give into his price every month and then he's set. He probably has everyone convinced than anything more than his price is way too high, they're just ripping you off. But anyone lower than him is terrible, unreliable, etc. He's juuuuuuuust right. 

I do agree though to get a 3rd quote. Always get at least 3 if it's for something new or if you haven't worked with the contractors before.

@Tai DeSa Impossible, you can't find deals on the MLS! And you especially cannot offer less than list price!!

Just kidding, great job! That's an awesome deal especially considering the low risk factor and time involved, I would do that deal any day of the week.

I know of a few lenders that will loan 85% of purchase price and 85% of rehab not to exceed 70% of ARV. They'll lend to newbies as long as the deal makes sense, the points may just go from 1 to 1.5 or 2, depending on what reserves you have, etc. Usually this is 10-14%

In my current situation I'm very happy to own my home rather than rent. I was able to use a VA loan and get the commission so I actually made money at closing, and it would cost me about $600-700 more a month if I were to rent this same house. If I was only planning on staying in the area for a couple years I would probably still rent though. Although I don't know how you can really get a good foothold in an area and be there less than 3-5 years.

Great post. Agreed, that is the toughest part to analyzing a deal in a "One size fits all" manner. What will the flipper do to add value vs. the rehab and rent person, how well will one person control their rehab costs vs. another, how good is their agent and are they using an agent that will give them a discounted listing (In hopes of getting multiple listings from them), how well will they work to get that appraisal number, etc.

The last 3 that I had appraised for refinances I met the appraiser with a list of recent comps 3-6 months that were all rehabbed to the same level, wrote notes on them (Garage vs. carport, did it back a major road, level of rehab, etc.), as well as a list of upgrades we did. I got the value I needed on all 3, but it did come in less than what it would have if I were to sell the properties. 

Looks great @Connor Maxwell !

The first deal is definitely the hardest. Dealing with contractors and managing the project has a steep learning curve. My first flip went similar to yours; if I were to go back and do the same project now I would probably shave $15k off the rehab and do it in half the time. You will learn and do better and better with each project!

Hopefully you made some money on the deal (I would imagine you netted at least $5k-10k after holding and selling costs?). That's just icing on the cake!

American Title Service Agency on Stapley Dr in Mesa, very familiar with double closings

@Curtis Mears

Not quoting a job is classic contractor BS, that is the biggest red flag IMO. A roofer should know approximately how much it costs to do a specific square footage. He may give a range, like $750 to $1000 depending on what needs to be done, but just quoting a dollar amount per man hour is pretty asinine.

I've been there. I paid $3000 on a change order for something similar (covered patio on a house I was flipping) that in hindsight should only have costed half as much. You live and you learn.

As soon as I hear the him and haw I move on. If I can't get an approximate quote over the phone it means they are going to try and overcharge. I've even asked things like "So on your last 5 jobs that were roofs for 1500 square feet what did you charge?" and a shady contractor hates questions like that. If I get something like "$5000 on the cheap end for a roof that only needed shingles to $8000 on the high end for a full redo with fascia work" then I know I'm good.

Great post. If the property needs significant repairs then it needs an offer, regardless of what the list price is. I've bought properties $100k off list price. List price is an arbitrary number that does not matter.

The only time I won't put an offer on a fixer upper house is when I call the agent and the seller does not have the equity to sell where I would need it. Other than that, it gets an offer, regardless if it's $30k, $50k, $100k+ off list price.

It happens every day when a listing agent drops list price by $20-$50k+. What if you had made that offer the day before they dropped list price and they accepted it? Now you're ahead of the game, rather than scrambling to get an offer in when the deal hits everyone's hot sheet.