All Forum Posts by: Glenn Espinosa

Quick update:

Closed on the house yesterday!

Tore off 1 sheet of paneling out of curiosity... framing was good, walls were insulated. House has copper wiring throughout which is a plus.

I've budgeted for converting the half bath to a full bath.

The drywall contractor that I am 99% sure that I am going with has quoted me $2660 to tear down the paneling and to install drywall. $2140 to install thinner drywall over the panels. I haven't haggled with him yet but he said there was room for negotiation built in.

Kitchen will be gutted and builder grade cabinets and laminate will be installed (inspired by J Scott's kitchen rehabs) - $3475
+1100 for uba tuba granite which I am still debating. None of the 4 comps I've seen have granite, only 1 had a new kitchen. I am considering it as the lone "sizzle" factor in the house.

Removing a 10ft section of wall between the living room and kitchen to really open up the house - $awaiting quotes

Laminate hardwood, carpet, and ceramic quotes came in at $4100 for the entire house
from the "higher end" subcontractor. I think its high and am waiting on quotes from 3 other contractors. Kitchen and living room will be hardwood laminate, in the estimate it was 455sq/ft of builder grade shaw laminate for $2483 including the removal and disposal of carpet in the living room and a layer of vinyl and luan in the kitchen.

Also, an electrician that I was rather impressed with (manners, presented his insurance and license from the start) came up with this quote which threw me back at first:

6 recess cans in living room
4 recess cans in kitchen
Install (3) 110volt smoke detectors
replace/extend switches and receptacles after drywall
GFCI protect kitchen sink
Demo wires in wall to be removed (wall removed by other)

Total $1795.00

Personally, I don't think I need 3 smoke detectors in a single story 1100sq ft home and that I could get away with 4 recess lights in the living room and 2 in the kitchen (keeping a chandelier for the dining area). If this is the going price for this type of work (I have 2 other electrician quotes coming this weekend) then so be it...

Everything is lining up. I will be renting out a dumpster this Friday and demo will start!

As far as scheduling subs this is what I have:

Demo
Carpentry/Framing
Electrical/Plumbing/Hvac
Drywall
Electrical finishing
Kitchen/Bathroom
Paint
Finishing
Flooring
Exterior

Thanks for the thoughts in advance guys.

Oh and if anyone wants to check out the property and let me know what they think it's

1005 Meads Rd Norfolk, VA 23505

Glenn

Thanks for all the advice guys! I will keep you all updated as I move along with this flip. I will seriously consider the drywall as well as revisit some comps in the area.

Also, out of curiosity I went ahead and posted the house on craigslist offering it to other investors at 58k (I totally made this number up). A guy calls me up talking about lease options and he wants to take a look at the place this weekend. I've read up on LO's a little since the phone call and it seems like it could be a big headache while at the same time could be a good opportunity for cash flow... Granted I didn't ask him what terms he was willing to accept, Is this something worth pursuing at all? I take it an LO is like renting it out, would I have to rehab first?

Thanks for all the insight guys! I will have to rethink my gameplan on this house regarding the drywall and rehab.

I still think I'll be way in the green zone once this is done as I've left myself wide margins for profit for fear of flopping on my first flip. I've overestimated the rehab by 30% thus far as well as underestimated the ARV by 15%... A fixer upper 3 houses down sold in April for 105k 3/2 1220 sq ft...

I will keep you all updated after I get more contractor bids.

I'll will get estimates for making the 1/2 bath into a full. I did talk that over with my realtor and it was an option from the start...

As for the drywall, the house is in pretty good shape, don't get me wrong. It's just that the walls are all wood paneling and I'd really like to get rid of them if possible... Thoughts? Also, if the $1/SF is correct then that'd be way below my estimates!

Just wanted to update everyone.

We have the house on contract and will close June 6 or 7th! Final price - $31,500

I have better estimates of rehab - $17,000

I've ran the comps again and we will list the house starting at 85k but expect to sell around 79k. We really want to undercut the competition, get the money out and flip 2 or 3 more by the end of the year.

Expected profit after quiet costs is 15k

I will let you know of updates, more contractors are coming out this weekend for bids.

p.s. Anyone have a rough estimate on drywalling an entire 1100sqft house, not including ceilings? Haven't talked to a drywall person just yet.

Also, does anyone market a house on their own say 2-3 weeks prior to finishing rehab in hopes of finding a quick buyer without having to hire a realtor? The house is located in a a big Navy town (biggest in the world actually) and I'd like to market to young Navy families to see if I get any bites prior to hiring my realtor.

I've put in an offer on a house with almost exactly the same numbers.

Offered $31.5k

Reno budgeted for $15 to $18k

Looking to list for $105k

A similar house sold for $121k and that was with 1 less bed and bath

Ok I got a better comp breakdown from my realtor and as far as houses sold recently we came up with this...

4/01/11 - 105k for a 3/2 1220 sq ft 115 DOM

considering this I think my initial 100k sale price might be ambitious, probably more 92k range for a quicker sale.

Bryan:
1. These comps are in the same neighborhood.

3. I have thought about the 4/1.5 bath issue. The house has 2 nice sized rooms and 2 that really should be offices. I'd have to weigh the cost of adding a bathroom with it's selling value.

4. This is another thing that we'd have to consider as my girlfriend and I actually enjoy doing this type of work. We rehabbed a personal home while we were in college together and rent that one out currently.

Also, we're not totally adverse to renting this property out later, it would go for 800-850 in this neighborhood. Maybe a cash out loan to get our money back and invest some more while renting this out? I haven't worked those numbers..

My girlfriend and I are about to jump in on our first flip and was hoping to get the green light from people here.

We've been searching for rental properties mainly but happened upon a foreclosure that came up for sale just 2 days ago.

It's a 1100 square foot 4/1.5 situated in a mediocre-good neighborhood. The street it is on is good with a lot of renovated and new construction homes.

While looking at it late last night our realtor found out from the listing agent that there is another offer that came in that day, the listing agent hadn't ran it buy the bank yet, however and will be doing so this afternoon. Ideally we want our offer to come in at the same time...

The house is listed at $29,900, appraised at 108k.
We would come in with 17k cash and take out a 15k personal loan or line of credit (we want to offer $31,500 considering there is another offer?)

The house is really not in bad shape from our first look. Thinking about new drywall, new floors, kitchen remodel and other cosmetic work. We'd do some of the labor (demo, we can lay down flooring) and contract the rest. Rough estimate looks at 15-18k renovation tops.

We'd hope to list the house for 100k. Comps in the area:
6/28/10: 128k for a 3/1 903 sq ft renovated home 1 block down

5/27/10: 81k for a 2/1 672 sq ft renovated home 1 block down

7/23/10: 94.8k for a 2/1.5 700 sq ft total renovation 2 blocks down

10/04/10: 96k for a 4/2 1400 sq ft not renovated .2 miles down

7/2/10: 121k for a 3/1 1100 sq ft .1 miles down

Thoughts?

When you put it that way Kevin... I can make $1,600 playing conservative poker in 6 months and have much more fun doing it. Ha!

Hey Jon,

I have read the 50% rule and the 2% rule and I knew from the start that this property did not meet those conditions. I will be managing the properties my self and I am pretty handy from rehabbing properties with my father since the 90's.

My goal is to leverage my properties every 2-3 years into larger and bigger investments.

I've already called my realtor and I am passing on this particular deal, however. It has been on the market for 6 months and could have used another price drop prior to my initial offer...