All Forum Posts by: Eddie Egelston

@Christopher B. Thanks for the detailed reply! That's the kind of stuff I imagined was happening.

@David Dachtera That is unfathomable to me! What were the permits for? Mundane stuff or a 1000 sqft addition?

Hi All,

Why is it that all these house flippers out there take 3-6-9 months or more to rehab their house?

I mean no disrespect, I just want to start a discussion and let everyone play devil's advocate.

I'm talking about a cosmetic rehab. (Picture a 2,000 sqft house from the 1970's that is all original on the inside.) The way I see it, on a cosmetic rehab, it should be about 30 days in and out. Maybe 45 days if you are using HML and need to wait on rehab draws.

So what am I missing? The way I see it, there are only so many tasks that need to be done on a flip. And most of them can be done simultaneously. The landscapers can be working when the interior is being worked on. The tile guy can work in the bathrooms while the other 95% of the house is being painted. Guys can be hanging cabs in the kitchen- on top of a tile floor while the flooring guys are installing laminated hardwoods. Then final plumbing and final electrical can get done same day right? Joe the plumber starts upstairs in the master bath and John the electrician starts downstairs. And God forbid the investor appreciates that "time is money" enough to get some guys to moonlight on weekends so that work is getting done 7 days a week.

I am only witnessing this from a far... my only guess is that if the investor bought the house with cash, he can carry it for awhile before it's too costly. As long as the contractor gets it done close to budget, and the investor makes his $40k profit, the investor doesn't really care how long it takes. Is that what's happening?

Please enlighten me as to some of the pitfalls, timelines and complications that I do not appreciate.  :)

Danny, this is an interesting discussion, thanks for getting it going! Let me clarify my comment earlier. I am fully aware that Houston is a large American city, and as such there are a lot of million dollar properties. My point is that they are much more rare in Houston than other locales. I googled this article that says you are trying to sell a property at about 23 times the median price in Houston. By comparison that same price in LA is only 7 times the median, and 10 times the median sale in NY, and that matters. The farther you are from the norm, the more difficult the sale.

In my market, at the price range of 3-4 mil there have been 84 sales in the last year... out of 939 listings taken. The odds of selling are less than 10%. I can't imagine Houston, or any other city would be significantly different. These are simply the numbers in black and white. Just food for thought!

Disclaimer: I have never sold a million dollar property nor have I done anything more than drive through Houston.

...But 3.7 mil seems awfully high for Houston Texes. NY, LA fine. But Houston? I don't even blink an eye hearing that a 3.7 mil property hasn't sold in 8 months... anywhere, let alone Houston. Nothing against the place, I enjoyed Texas when I was there, but it's not known for high end real estate.

A simple question to ask your agent, is the issue time or money? Is it over-priced or have you simply not connected with your buyer yet? I had 2 listings recently where my quick-trigger finger was telling me to lower the price, but I resisted asking the owner for the price change and we sold for 98% of asking prices. So we were not over-priced, just needed patience.

Good luck!

Hi there,

I my opinion people get waayy too hung up on calculating these things as a percentage. It's a pet peeve of mine. Once you know the true dollar cost of buying and selling, you can figure your own percentage; IF you are buying and selling in the same price range every time.

The are 2 problems with asking this question. #1 closing costs are a relatively fixed amount and do not vary a lot as a percentage. (An attorney might charge $300 whether you are selling a $100k house or a $400k house- the one big exception to this is Realtors who usually charge a fixed percentage.) And #2 there are too many variables. The biggest one being the price of the property. Are you flipping half-million dollar homes? If so title insurance, an attorney, escrow fees and recording docs are a small chunk, about $3,000 aka .6%.

However if you are buying $50k houses and reselling them for $150k that percentage could climb to 1.6%. And there are a dozen other questions to ask depending on your strategy and your market. Are there origination points? What are you paying your Realtor to sell? Are there well & septic tests? What are transfer taxes in your area? etc etc.

Hopefully someone with New Jersey knowledge will chime in. Your best solution is to ask local professionals. Anything else is a very broad guess in my opinion.

Thank you for the input @Ken Min

Hi BP,

I was looking at a house and I found a puddle of water in the middle of the basement floor. Not near anything. Not near the sump pumps, furnace, washer / dryer and there was clean drywall above the spot. It did happen to be adjacent to a lally column w/ footing. Backstory:

This house has 3 (THREE) sump pumps. It has been raining like crazy here and I purposefully went to this house to observe it after all the rain. All the gutters and sump pump spouts are not extended away from the house. The grading is okay with 2 neighbors in a lower position than this lot. I spoke to a neighbor and went into their basement and it was bone dry- they have 1 pump.

I am baffled as to where the water came from. Can water seep up from the basement slab when you have 3 active sump pumps?

Thoughts?

Hello BP-

In the last month I have noticed in my local market (Chicago) that properties on Hubzu.com started to fly off the shelves. The seller seemed to be much more willing to make a deal, as compared to before when it seemed those properties lingered on the market for an extra long time.

Yesterday I read this news article that basically said OCWEN, the main loan service provider that sells it's REOs on Hubzu.com is being sued by federal and state authorities. 20 state regulators have stopped them from originating any new business.

It seems to make sense then, that the folks at OCWEN knew this was coming, and started to perhaps sell off more inventory to raise cash? Being banned from originating business in 20 states would seem to cut into cash flow a bit!

Has anyone else noticed this trend on Hubzu.com in their market as well? Any thoughts on this development?

Hi there, I have clients who have gone through Armando's system. Here's my second-hand take on it.

The "wolfpack" is a real thing. For 2 of the 3 houses my clients bought they partnered with a member of the wolfpack to close the deal. My understanding is that it is still a pretty large and active community of cash investors. But I think that is the only aspect worth while.

The "education" you receive is nothing more than what you could find by reading a house flipping book or clicking on this website.

Thanks All for the help and well wishes.

Phillip Mazur I will PM you. Thanks!