All Forum Posts by: Justin Todd

@Bryan Devitt PMing you.

I should mention, the weekly pay schedule is shown on the contract for a 7-week period. So really beyond that, I wouldn't be obligated to anything at this point. Good call, though.

@Jim Goebel

@Charles Goetz

thanks for all of the input, it is greatly appreciated. i'll shoot you guys a PM with more details.

hi, guys. I was curious if anyone knows what the typical "going rate" is for a general contractor on a normal single-family residential flip. this will be in Georgia. i've been communicating with one who wants to be paid a weekly rate nearing $1k and also 5% of the project costs on the back end. I haven't signed anything yet, but plan on buying a property soon and need to know if I'm getting ripped (or rather, if it's even a tad bit high). GC has been in the business for a few years and knows I'm newer to the game. rehab costs are going to be in the range of 70-80k, we've speculated. that makes his rate for a 6-8 week project somewhere around $9,000. that's a ton of money for someone who isn't driving a single nail. I understand the purpose of the GC position isn't manual labor, but that still feels steep for simple supervision, especially considering the budget is tight. if this was a school/hotel/restaurant/etc I could understand. do GCs normally charge both a weekly rate and a flat percentage on the end for single-family jobs? we already have all of the subs lined up, about half of which I brought. any input from you guys? all feedback is appreciated but please try to stay on track w/ the question at hand, which is: is this customary and reasonable? need to get this ironed out relatively soon. thanks in advance! you guys are great.

hi, does anyone know if u need a business license to flip houses in GA? maybe on the state level, or even on a county/city level? pretty sure the answer is no.. but just curious if anyone knows something I don't. thanks!

good question. i'm gonna have to read that article, lots i could learn!

Hey, guys.

I've got a question about some BPOs I had a couple Realtors send me on a property I was considering picking up financing for to flip. Why are their numbers so drastically different? I'm hoping to get a response from somebody with experience in flipping properties, but any advice is welcome. It's bothering me because I don't want to pay the $650-700 for the HML to gather their own evaluation of the property if it stands the chance of coming in below what they cover, because if it does, I'd have just thrown that money away. And also, the biggest issue, is being confident in the value to be able to sell for a profit after purchase.

I ran a CMA myself and brought the property in at roughly $124,000. This wasn't anything too comprehensive, just the general stuff: +/- 20% square footage, same stories, close to the same year built, within half a mile, within the past 3-6 months, all that jazz.

For some reason, though, their numbers are coming in at anywhere from $102,000-133,000. That's a huge difference! I don't have access to the BPOs any longer, but is it just safe to assume that somebody was using the wrong comps? If so, that's confusing, considering I didn't grab any "newbies." They're all seasoned realtors in the town the property is located in, with plenty of sales and experience under their belts. (I'll mention that one of them was using blatantly wrong information to acquire one of the lower end numbers, in that they'd listed it as a 2 bed 1.5 bath when this has never been true, so it's not even like it was outdated, just simply wrong).

Am I reading too much into this? If I'm going to start investing with financing rather than just wholesaling for a fee, I'd like to be extremely confident in the numbers... but with this kind of feedback from seasoned professionals, it's got me a little nervous, to be honest.

Thanks in advance,

Justin

@Louis Jeffries

Yeah, I understand what you mean about the rent being at a loss, but that's why I'm looking to flip rather than hold long-term (the only way I would do that would be if I could refi). Beyond that, as unavailing as this might seem, the owner is selling at a discount for a reason that I'm well aware of but won't mention. So I've covered my butt there.

@Tom S.

I've never heard that before. How does that work? For instance, if a family member were to sell their property to another family member for $10 or whatever amount they choose, that surely wouldn't hold any water. I'm curious to hear about this

@Jon Holdman

Thanks for the reply. I'm not trying to do a fix and flip with a tenant in place, but that assumption is reasonable considering I didn't touch on that in my original post. The property was fully rehabbed, including the addition of a new bath, 6-7 months ago, and is in a nice neighborhood with good-to-do tenants. Beyond that, if things go bad, the 2nd HML could just fill my shoes and make payments on the loan until he himself sold it, then he'd make all his money back plus a heck of a lot more than he would have just receiving interest off that amount. Things going bad, are things going good; for him, at least.

@Steven J.

Since there's no rehab to be done, beyond the always possible tiny cosmetic repairs which hardly take any time or money, would you suggest temporary housing for the remainder of their lease? This way, I can hurry and sell to a retail buyer. I think this is a really interesting idea. Please let me know what you think.

@Mark Bookhagen

 @Dion DePaoli

@Wayne Brooks

@Louis Jeffries

@Darrell Shepherd

In hindsight, I left out a lot of critical information. Sorry about that. Okay, I've already been "pre-approved" for the purchase price of the property after filling out a fairly extensive application. Beyond that, I've spoken with one of their agents and verified the numbers, etc. This property has already been rehabbed (about 6-7 months ago) and needs zero work. I'm buying it at a 32% discount from the current FMV. There's room for about $37,800 gross profit not including rental income. It's being rented for about $1,000/mo and my lender will not charge payment for the first 5-months (that's their claim, but it's actually rolled into the original purchase price / loan amount). So I'll have the rental income straight-up for the first 5 months. Further, my girlfriend is working a full-time job but likely doesn't have much better credit than me. We're young and don't so much have bad credit history, as opposed to no credit history. Would the bank include that income + the rental income alone being twice if not triple the monthly mortgage payments? Paying the loan would be no problem at all, and neither would representing that claim. But I know banks have their requirements regardless of what I can provide, and that's one of the things I was trying to get a better feel for. Also, I'm not very familiar with having a lease converted to a near-term expiration. At this point, it would honestly be profitable for me to pay the tenants off to get them to terminate the lease at an earlier date, considering I'll be reimbursed any of the 5-months ( at 18% APR) I mentioned above and that was paid in advance that I do not use. And it's on an 8/mo term because that's all the HML would allow. If I left anything out, ask me and I'd be happy to answer. My brain's just been racked these past few weeks. But any questions will be provided an answer.

Thank you guys so much for the info and guidance!