All Forum Posts by: Nancy Zhao

I'm considering options for the next flip. One of which is to work on it full-time myself. I would hire out the skilled labor, but do the majority myself. I would also consider paying myself a wage from the rehab budget, either as an individual or through a second company that I make for the purpose of submitting the labor invoice.

My questions are as follows:

1) Would I need to get a GC license for this, especially if I own the property?

2) Would, or do you, take paycheck for labor when you do rehabs?

Disclaimers: I live in WA state, and will be getting my RE license next week.

Thanks guys!

- Robert

Washington state has a specific anti-flipping law that requires a general contractor's license for any improvements above $500 on flipped homes.

2 Votes

Does anybody have recommendations for a stager they liked? I've used several and didn't really like any of them. The ones that do a good job were far too expensive, and the cheap ones tend to do a terrible job.

0 Votes

San Diego, California

Originally posted by @Charissa B.:

A sibling and I are interested in dipping our toe into flipping. We looked at a few properties and found one that we like. It's a homepath property and we can't get a straight answer on whether it will qualify for conventional financing without a rehab loan. How do we figure that out?

It looks like the roof might have a leak or may have been leaking at some point. There is minor drywall damage. We assume it needs a new roof.

Our realtor also found a septic inspection report from earlier this year that says the septic was showing signs of malfunctioning. It says there are some indications of a leaking tank.

One of the rooms is missing some flooring and someone ripped out a wall and there is drywall missing in that space and a plug and light switch hanging from the ceiling. In the back of the house the paint is peeling a bit and a few boards need replacing.

The house could be worth anywhere from $200k-300k and it's listed for $120. We can put 20% down and pay cash for the repairs, except maybe the septic. We would also offer less than $120. Unfortunately we can't pay for the house and repairs in cash so we would need some kind of financing. An alternative option is that my sibling lives in the house after we have fixed it up, or we rent it out.

When you get a rehab loan how do they determine what they want you to fix? Since with a rehab you have to pay contractors to do everything, does that usually make it not worth it to buy?

If your hard money loan is only on purchase price and you don't take any rehab funds, the lender will not care who you hire to do the rehab work.

0 Votes

If the contractor is quoting you $75/sqft you can do it yourself for $40 by hiring subs directly. Yes you will have to put hundreds of hours of your own time into it instead of merely signing a check, but that's where the profit is.

On my most recent flip the seller had multiple contractor bids done and was quoted a minimum of $150k for a rehab. My cost will be under $70k using better materials. If you have the written contractor bids that breaks down the project line by line you can post it here and people can tell you where you're being overcharged.

1 Vote

You're not getting 50% of ARV in San Diego unless it's a scrapper.

1 Vote

Your flip entity should be a S-corp. Pay yourself a modest salary and the rest as profit distribution.

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Yeah the market is pretty different in CA, I've even seen $1m newly built homes with laminate flooring.

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What do you guys do for flooring on nicer(750k+) flips?

I generally use budget engineered hardwood(~$4/sqft, 6-7" wide, 3/8" thick) for everything but after spending almost two weeks trying to match stair treads with the flooring on my current project, I gave up and decided to use a nice laminate instead.

The way I see it, here are the pros and cons:

Engineered Pros: You can tell the buyer it's hardwood.

Engineered Cons: Somewhat more expensive, not as pretty unless you go high end which are much more expensive. Extremely difficult to match trim pieces(especially stairs) if the manufacturer does not make a good quality one.

Laminate Pros: Looks, huge 10"x80" planks for only $3/sqft. Cost. Ease of finding coordinating trim pieces.

Laminate Cons: Looks, repetitive patterns are a concern. Not a selling point to buyers.

Right now I'm leaning towards laminate on everything with stairs unless the home reaches the mid- high 1 million range. What do you guys think?

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There has been net domestic out migration from CA since 1990, this is nothing new. Far more people were leaving during the early 90s and the mid 2000s than today.

1 Vote

Originally posted by @Vinay H.:

THis is what happened to Sydney which was as hot as San Francisco in 2016

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A Stanmore terrace in even worse condition is listed at $1 million. The walls are riddled with cracks and parts of the floors and roof have collapsed. It too requires hundreds of thousands of dollars to restore it to a liveable standard.

There are also a range of other homes currently advertised at considerable discounts.

A four-bedroom duplex on West St in northern beaches suburb Balgowlah is currently listed for $325,000 below its original price of $1.9 million.

In Belfield in the Canterbury area, a home at Statham St is being offered at a $275,000 discount on the initial listed price of $1.45 million.

A unit inside this building at 301/1-9 Meagher St, Chippendale, was first listed at $520,000 to $550,000 but sold for $429,000.Source:Supplied

A two-bedroom unit on Liverpool St in Darlinghurst is advertised at $100,000 below the original listed price of $1.5 million.

Realestate.com.au chief economist Nerida Conisbee said it was inevitable that sellers would reach a point where they could no longer command prices $100,000 or $200,000 above what comparable properties sold for months ago and still find a keen buyer.

“Sydney pricing has been extreme for many years,” she said. “We’ve now hit the point where buyers can no longer continue to keep paying more.”

Sydney real estate was much more over-priced than CA real estate, and Australia/UK were hit by economic downturns recently, unlike CA which is doing extremely well.

2 Votes

All Forum Posts by: Nancy Zhao

Nancy Zhao has started 11 posts and replied 68 times.

Post: Am I required to get a GC license as a rehabber?

Post: Staging Company Recommendations?

Post: Does a rehab loan make a flip not worth it?

Post: How do you make money flipping?

Post: Owner financing for fix and flip properties

Post: SC tax for live-in flip vs. flipping as a business

Post: Engineered vs Laminate

Post: Engineered vs Laminate

Post: People are fleeing California, are you?

Post: People are fleeing California, are you?