All Forum Posts by: Matt Stewart

I think it's tough to use any type of standardized spreadsheet or tool with any accuracy.  But it is a good starting point.  I've adjusted the deal analysis spreadsheet I use dozens of times to take advantage of the lessons I've learned from making mistakes.

Whatever you use needs to be able to account for multiple variables.  Are you hiring a GC, hiring subs, or doing some of the work yourself?  That has a huge impact on your labor costs.  How much has the price of materials changed in the last year?  If you're building a deck you need to know the current price of lumber.  How are financing the deal?  Hard money is expensive so you need to factor that into your soft costs.  And always add in a line for contingency costs.  I also budget for a punch list.  All those little things at the end of the project can add up.

Ultimately you need to develop your own tool/spreadsheet.  Using someone else's tool is just going to be too generalized. And in the end, not accurate enough.

@Derek Nemec  I've bought a few that way.  In Ohio you have to wait for the court to confirm the sale.  That usually takes about 30 days, but I've found it may be longer if the property is still occupied.  Once that happens they'll mail a copy of the deed to you, or you can print it off the county recorder website if those records are online in your county.  The deed you get is a sheriff's deed and there is no closing.  I always have my title company run a title search and issue title insurance.  That way I'm certain there's no issue when I go to sell.

@Mark Aiken I almost always act as the GC on my flips because I want to have as much control over the rehab as possible.  I also buy all materials myself, so I'm controlling costs and avoiding upcharges.  Talk to other investors and rehabbers to get recommendations for subs.  If you just try to find them yourself you're going to end up losing money.

As to the order of things this is how I like to do it.  Demo, rough (plumbing, electrical, framing, etc...), drywall and prep, painting, flooring, fixtures (cabinets, vanities...), doors & trim, finish, and punch.  Some will say to put off painting until later, but I prefer to prime and paint before putting in any new flooring or fixtures.  I'm in Ohio so exterior work is always weather dependent.  

For the smoke smell you need to prime everything with oil based Kilz.

@Robert Ellis  Funny how your perception of an area changes once you own property there.  Nice analysis!

@Diane G. It varies quite a bit and competition is driving the prices up on a lot of properties. I've been lucky enough to get a couple auction deals at only 25% of ARV. But typically it's more like 60-80% of ARV.

@Account Closed Yes, you need to do your title search before you bid.  Once you win the bid if you back out you will lose your deposit and run the risk of being charged with contempt of court by the judge.

@Alexandre Marques dos Santos  Plumbing and electrical are fairly inexpensive in the broad scope of things.  My biggest concerns are always foundation issues, or a bad layout that can't be easily fixed.  You always have to consider the age of the property as well.

@Alexandre Marques dos Santos  I've bought a few properties off auction.com and you absolutely have to do your due diligence.  You can't get into the property to do a walk through or have an inspection done.  So you need to do your best to determine what it will need from an exterior inspection.  If you're lucky and the property is vacant then you can usually walk around and look in the windows.  You can learn a lot about the house by just looking at the outside of it.  Generally if the landscaping looks like crap, there's peeling paint and other signs of deferred maintenance on the outside of the house then you can bet the inside will be in similar condition.

Definitely check for liens or have your title company do a title search.  If you win the bid they'll give you the option of using their title company or your own.  Always pick your title company.  It may cost you a few hundred bucks more, but it will save you a lot of time and headaches.  And pay for title insurance to make sure you've got a clean title.

@Michael Hutchinson  I'm a fix and flip guy, but we do take on work for other investors in between my projects.  I've got a good crew and I make sure they never have to go looking for work.  Depending on the scope of work and of course timing, we might be able to help each other out.

@Chris Gawlik Yes, that map is fairly accurate.  Some of those areas are gentrifying and getting better, but by and large any area where you can buy and rehab a house for under $100k is going to be a higher crime area.  

@Chris Gawlik  Are you including your rehab expenses in that $100k?  If not you're going to be limited to Linden, Hilltop, and a few pockets on the east and south side.  Those are going to be C/D class areas.  I don't do a lot of buy and hold but it might be difficult to get a tenant in those areas paying $1000.  I usually see rents in those areas in the $600-800 range.