All Forum Posts by: Account Closed

Thank you Brett, I knew the $300 to $400 would have to cover the maintenance and insurance costs ( correct i didnt account for management costs regardless that i probably will manage myself). 

however i didnt really think about the idea of trying to get tenents to cover utilities. I do think rent is in line and them covering utilities or atleast one of the two ( electricity and gas are pretty much the same around here, 130/month plus water an trash). 

I am actively looking for multi family properties for long term holding. I am assuming/thinking that a multi family will make more money than a single family home just about every time?

wanted to get some experienced opinions on a duplex im looking at.

here is the property;

http://www.npdodge.com/property/22964852/7616---76...

below is a 100k and 90k purchase price scenario. owner pays utilities, i called the utility companies and got the averages so the total listed below covers both units. 

I know they have it listed for 115k but its been for sale for 1year, the agent says the seller has been off and on about selling the property for the last year other than that there is no major reason the property hasnt sold. (i think its because its over priced which is why i think i may be able to get it for 90k or 100k, questions is if those price points even make good sense though). has new roof, new exterior paint, reletively good basic condtion interior. very good area, i used to live near there.

so what do you guys think? i know its not enough to hit the 2% rule, but good area, already rented and small low maintenance property. and you can almost never get 2% in this city it seems like unless you go to the ghetto.

I think the main thing that joes along with Joe's idea of paying cash for the house than refinancing later to get the cash out is the following;

- nearly any house from an auction you must buy with cash

- any house that wont pass an inspection (pre flip) you must buy with cash

therefore most houses that would interest an investor, the only way to get the house is with some form of cash (commercial line of credit, HELOC, cash in the checking acct, etc.)

you sound like me not too long ago....... i so wish I would of held out for renters with better credit..... late every (EVERY) month atleast a week or two..... have to constantly call to get rent..... willing to bet that the one month deposit i made them give up front will ( in their head) be the rent i dont get before they move out.

Jassem, but that seems pretty low even if you were working for free though doesnt it and shouldnt you assume your time is worth something?

I mean cheap carpet alone costs over $1.50/SF installed if ur lucky.

painting typically costs around 1.15/SF (costs spread over the total FSF of a house) assuming your hiring the cheapest guy you can find off craigslist. 

cheap laminent in kitchens and bathrooms costs atleast $3.00/SF installed.

I havent been in a house yet that i was looking to flip that didnt need appliances and at minimum new cheap fixtures. even with the cheapest of everything, $1 to $5/SF that would only give you a $2,000 to $10,000 total budget on a 2,000 SF house??

Hi everyone.  have completed 2 houses so far, ive tried to keep detailed records as to every purchase, every man hour spend doing the work and this is what i have come up with;

* I came up with these numbers by doing 90% of the work myself, no subcontractors. I assumed a pay rate to myself of $30/hour and I typically hire semi skilled help for around $15/hr. I did all the work, from drywall to installing new floors to plumbing and electrical. All work was done with permits......well most of it was ;)

* houses are entry level to next step above entry level. fixed up selling price of 100k to 225k

$20/SF = minimal work; (house could be lived in as is, although severly needs updating)

replace countertops, salvage kitchen cabinates, stainless steel new appliances. light update to bathrooms, paint and new carpet or refinish existing floors. replace most light fixtures and faucets. replace all doors. light electrical and plumbing primarily only to update fixtures. little to no exterior work other than light landscaping. 

$26/SF = moderate work; ( lengthy uninhabited house, cant be lived in without some minor work at minimum) 

everything above, plus: complete gut and replace kitchen and bathrooms top to bottom, replace one HVAC component such as AC or furnace. light to moderate amount of drywall patching and replacement. light to moderate electrical and plumbing needed and some new runs. new floors throughout house. replace one of the following; roof, windows or siding. light landscaping and a new deck. 

$31/SF = heavy work; (typical abandoned/condemned house, heavily vandalized) 

everything from both categories above, plus: moderate to heavy drywall replacement throughout the house, mold/water damage remediation possibly needed. some walls may need to be moved to correct layout issues. substantial amount of plumbing and electrical need replaced. all three needed; New roof, siding and windows. moderate to heavy amount of landscaping needed, new deck, possibly extra structures on property need demo'd and removed such as extra gerages, etc.

when i say $$/SF I mean if i look at the MLS and see the house has 2,000 finished square feet I would take my number such as $20/SF and multiply it by the listed 2,000 so my budget for example would be $40,000.

I obviously didnt include every single work item that would be included in these budgets but it gives you an idea of the 3 types of houses im talking about.

 my costs above are for actual renovation work only, they do not include your monthly carrying costs such as utilities, taxes, insurance, loan interest, realtor sales fees, closing fees, etc.

do any of you have numbers you use to quickly gauge how much renovation work will cost without having to spend a full day calculating every single thing over and over again for each house? I still do detailed estimates when getting to the point of writing an offer on a house but for screening out the new daily forclosures and auction houses that come up, im trying to get a simple formula for the rehab portion. 

absolutely not, do not get a realtor involved. call a title company. they do everything that a realtor would do including closing..... only difference is you actually have to use a title company involved even if you add a realtor to the mix.

- Title companies are vary familiar with FSBO transactions and typically will take over the transaction and walk both of you through very easily and painlessly.

- they will give you both a contract to officiate the sale between the buyer and seller (no need to make one up yourself although i have done so, many free ones available online and if your half decent at contact law it is not that complicated to make it legally binding, your title company would review it  anyway to ensure accuracy.) 

- they will coordinate with the buyer for appraisals, termite inspections, coordinate with their mortgage lender, earnest deposits, etc. 

- they will be the primary contact, so after you and the buyer have settled on the price and contact a title company, they do all the rest of the work! and for a very reasonable fee that you would have to pay regardless with closing!

- ive done many FSBO's buying and selling. if you are competent enough to accurately price your home and handle the negotiations, you will ask yourself why you have ever paid the big money % to a realtor afterwards.

most people dont know this but when it comes to the actual transaction, this is all done by a title company. a realtor is there to basically to help find the buyer/seller and act as a middle man instead of the buyer and seller negotiating directly with each other (the method i prefer).

call a title company and just talk to them, you would probably be amazed at what all they do and how little it actually costs to transact real estate