All Forum Posts by: Mark Parzych

Today the concrete was finally poured. I peaked inside to see but didn't take any pictures. My contractor has been taking longer to get things done than I wanted, but at least it continues to move. My GC texted this afternoon saying he has a tree trimmer on site ready to do some work. We got him down to $400 which I thought was a little high, but after checking it out I can live with it. They will finish up tomorrow morning and are doing both the front and back yard. There were a lot of branches by the power lines that had to be removed as well. I'll send before/after on Friday when they are done. A tree in the front got trimmed to where it's leaning heavily on one side. The tree trimmer said if he cuts it down to a few feet above where the tree branches split off it will cause the tree to regrow evenly. My issue with that is the tree will look dead and I'm worried about it being able to sell like that. Do I keep it as is or trim it down almost all the way? Or just remove it entirely? 

@Kevin Nguyen

I am doing this alone. My failed flip taught me a lot of what to look for so I'm much more confident this time around. The previous owner went through an architect to get a new floor plan. He was nice enough to send them to me to finish off the rest. You will see old and new layout along with lighting placement. I actually am modifying the lighting quite to create better flow. For example the dining room table light fixture is tied into the living space and they really shouldn't be. 

As far as details of AC vent locations, that's going to be my GC and his HVAC subcontractor. The living room's ceiling is very low and there's only about 3-4 inches from the ceiling to the roof so we're going to have to be a little create to get good flow to that part of the house. 

In terms of light switches, I went through my modified lighting layout with my contractor which includes light switch locations. For outlets, there electrician will be following code which takes care of itself on my end. 

Concrete is broken up and will be poured tomorrow. Things appear to be on schedule. I want the electrical/plumbing/HVAC to be on site by the 27th and finished with rough in and inspections by the 7th. 

Update:

Closing was successful and my contractor is lined up to start tomorrow. I had a lot of back and forth with him over the past 2 weeks and did a 3 hour walk-through yesterday to go over the bid in detail. I feel my expectations are clear, and the vast majority is captured in writing. His bid was not the cheapest but I have room in this house to pay for a more reliable contractor, and after my last attempt I feel like it'll be worth it in the end. 

Here are before pictures:

I have a lot more but this gives a good idea.

As you can see by the before pictures, some work already started when I bought the house. It has new framing, new roof, new siding, and new windows. It's basically a shell in it's current condition. It'll need HVAC, all new gas and water plumbing, all new electric, insulation, drywall, moldings, floors, paint, kitchen, bath, etc. Something unfortunate is that a the previous owner poured new concrete for the foundation but it was done horribly. I'm going to have to tear it up and redo it with rebar to strengthen and level out the floors. 

I purchased this house for 29k. Found it from craigslist and later found out the seller was on Bigger Pockets. It's a 1270 SqFt, 3 bedroom, 1 bath house. Much of the house had termites and framing had to be replaced. The previous owner modified the house from a 2/1 to a 3/1 with new framing. I'm not in love with the new layout but it was definitely the right decision to add another bedroom and create an open floor plan. 

My budget for this remodel is 45k; where 39k is to the contractor and 6k is for some materials I'm responsible for purchasing. I'm paying for all flooring, tiles, appliances, kitchen and bathroom fixtures, lighting, and a few other things. I'm good with that so I can stay in control of design. I'll systematize as I do more houses but this gives me a good understanding of prices for different materials. 

ARV from my lender's appraisal is 110k. I believe ARV is 135k+ with how I plan to fix it up. I know that's a very big difference. Days on market is very low in this area and I'll push my listing price at the top end of comps. It'll be interesting to see who is right. Even if it is 110k that still gives me plenty of room for profit.

My timeline is to be on the market by Jan 5th. I have a business trip from Jan 6th to 29th so I'd like to come back with my house in escrow, close sooner after, and start on my next one in Feb. That gives my contractor about 2.5 months, which he is a little hesitant about, but I feel like that's very doable.

The first step is fixing the concrete slab. Once that's complete then HVAC, electric, plumbing, and some exterior work gets started.

I am closing on my 5th house, which is my 7th deal, on October 17th and my plan is to renovation and sell it. I'm buying it from another investor who started writing about it in his BP blog but I won't share those details until it's officially in my possession. 

A year ago at this time I only had 2 houses and 1 deal. I don't count my primary residence as a deal despite house hacking it. A lot has happened in a year and I've had a major setback as described below. I'm still relativity new to real estate but I have built a strong foundation thanks to BP. I've done a little of several things and I'm still I'm trying to figure out where my time should be spent to get the most out of it.

I have several reasons for writing a public diary like this. 

1. To keep me accountable because I want to be able to go back and see what went well and what didn't. I want to be able to state specific goals/desires at moments in time and see if they're met.

2. To be a learning experience for other new investors for things I do well and things I screw up.

3. To serve as a forum for advise and help if/when I'm stuck or not sure what to do.   

I've attempted one renovation before and that was a disaster. I worked with a partner 50:50 who had much more experience but multiple contractor issues, health issues to my partner, and high crime in the area lead to most of my capital being tied up for 9 months with no profit to speak of. I did learn a lot about what not to do, so maybe I'll be better off going forward. I'm definitely coming into this flip much more prepared than last time. I may post that story if I get some interest. 

This time around I'm using a local bank as my lender instead of doing all cash. They lend 80% of the (purchase price + reno cost), or 75% LTV of ARV, whichever is lower. At only 1PT, and 6% interest it's a great resource for cheap money. The downside is they need 4 weeks to close like a traditional bank so the seller needs a flexible closing date.

I'll post pictures, show the numbers, and provide much more information as things get going. I don't want to be too premature since I don't own the house yet. I'm hoping to finalize my contractor's bid proposal this weekend so we cant start on Tuesday. 

I live in the fifth ward and could help you out to analyze the deal. Some areas are better than others just like any location. I've driven the streets and keep up with 5th ward politics and developments.  

@Brian Gibbons,

I know that my marketing, communication, and presentation is a weakness for me. I am definitely the analytical type and it's difficult for me to establish an emotional connection. That's one of the reasons why I wanted advice on my proposed letter. I'll cut it short like @Troy W. suggested and send some out to get something started. My plan was to use yellowletters.com or a similar site anyway for the bulk of my direct marketing but I thought sending a more personalized letter for vacant houses would get a better response. @Rick Harmon I'll pick up that book because I know that the marketing world is something I know nothing about.

Thanks

What do you mean by cut 75% of copy?

I've spent some time driving around the neighborhood looking for vacant houses. Some of these are clearly abandoned while others show more nuanced signs of vacancy.  I want to send a letter out to these owners and I'd like some help. Thanks for you input. Formatting is a bit off but you get the idea. 

Dear ___

My name is Mark and I’d like to buy your property at ___.

I am a local investor looking to buy a house in your area. I noticed that you do not live at this house and I’m wondering if you are hoping to sell. There are many ways why selling your house to me is much easier and simpler than attempting to list it with a Realtor.

Ø You have more flexibility

I work with your situation and work with you to get the best deal possible

Ø You choose the closing date

I can close in as little as a couple weeks to as long as 4, 5, 6+ months. Whichever is best for you.

Ø You make no repairs

I will buy AS-IS and you do not need to fix anything.

Ø You can easily sell a vacant house

Why spend money on a house you will never live in? I’ll buy your house no matter what condition it’s in

Ø No fees and no commissions

You will not pay any Realtor commissions, closing costs, repairs, transfer taxes, title fees, etc. The price we agree to is the money you deposit in your account.

Ø You don’t have to let strangers into your house

Only I or one of my associates will come to the house.

Ø You don’t have to worry about financing

I am not going to a bank to get a loan approved. You can feel safe that funds are available for the offer we agree to.

Please call me at ____. I look forward to hearing from you.

I went to one of their 3 day seminar classes for $100. For someone brand new to real estate investing and wholesaling its worth it. Nothing Bigger Pockets can't teach you but it's pretty condensed and good motivation. They try to get you into their Guru program which costs a LOT but aren't that strong armed about it.