All Forum Posts by: Jack Srimani

Hi,
I just checked yet another house in a very nice locality. This is bank owned. The house needs major renovation. The asking price is still high which I think will come down in the next few months. Once renovated this house can sell pretty quickly. At least that is my assumption. However when I checked out the basement some of the edges had water. I did not find mold in the basement though. I would like to know if this is a major issue or not and if there is any moderate expensive way to remedy this situation. Also my research shows that this can be a nice rental after complete renovation provided the purchase price of the house comes down. Thanks

Thanks Mark for your input. I am not much of a tool guy. So I am not sure how much hands on I can contribute to my project.

Thanks qkjones and financeexaminer for the valuable advise. If I get a GC that has good record and also the bid is reasonable then probably I am more inclined to hire one. This is more so due to the fact that I am new to the business and has to learn the game. However I feel once I get the experience of a renovation project then I should be able to manage a project on my own.

Hi,
I am getting involved in my first flip project very shortly. I am not sure whether it is wiser to get a general contractor for renovation of this house or should I act as a general contractor. Does getting a general contractor mean that the profit would be cut by significant amount or it is just a myth. I would request your feedback on this. Thanks

That sounds great. I am sure I will ask for help in the near future for advise.

Thanks Will for more illumination for me. Just to let you know that this will be a first time flip experience. I read from various sources that first time is the hardest as it will give me much experience of what to and what not to avoid. On top of my head I have a question for you. How does one find a general contractor whom I can rely. I have been reading horror stories that contractors can delay the project so much that all profit potential can evaporate. Is looking at craiglist of angieslist a good idea to get a good contractor in my area ? Apart from a general contractor do I need anybody else to start this project if everthing goes well and can buy this house. Also if I get a loan for 15 years say at 4 percent and then in six to eight months sell this will it be a violation. I am already approved for loan for rental at that rate and not a house flip project though. I can manage to get some fund from someone for renovation which I am thinking around 20k. I appreicate your feedback.
PS: Do you have any word of caution for first time flipper.

Thanks Charles and Steve for the generous help. The water and sewer is paid by the owner while the heat and electric is paid by the tenants. The electric and heat are separated. Here is more details from the Schedule E form, one from 2008 and one from 2009.
Gross rent: 16500
Insurance: 1100
Legal: 650
Repairs: 3500
Taxes: 8000 (including taxes in previous years)
Uilities 2500 (water and sewer is the only utilites paid by the owner)
Depreciation: 3500
Other: 1000

Total expense: 20500

Total loss: 4000

The above was for 2008 details

Gross rent: 19500
Insurance: 1100
Legal: 50
Repairs: 12000
Taxes: 7400 ? not sure why tax is 7400. I was told it is 3200
Uilities 3700 (water and sewer is the only utilites paid by the owner)
Depreciation: 2400
Other: 4000 ? not sure what this means yet

Total expense: 31000

Total loss: 11500

The above was for 2009 details

So with this detail does the property look any promising? Do I need to consult a real estate lawyer or a real estate CPA here for any reason should I decide to buy this property. I appreciate your feedback.

Thanks Steve for your input here. If the expense takes away nearly fifty percent of revennue then the fifty percent rule will not work. The problem is what hidden expense is there for this property. Also it seems the quality of the tenans are not too good due to evication procedure taking place. I have to take a more hard look at this.

Jon
My scenario is kind of what you assumed. I am not sure about concession in my area and neither am I real estate license holder. It seems with this stipulation it looks the profit will be around six thousand. So unless the house price can be brought down then the profit situation will not be very promising.
Thanks.

Thanks Dan for your input. Your assessment is just polar opposite to that I have done. This is now a problem for me to decide.