All Forum Posts by: Peter Mckernan

Quote from @Courtney Hamilton:

Novice investor here. Would anyone have a good fix and flip spreadsheet they could point me to?

 One tip is too is reaching out to some people in your market place that are doing flips and see if they can send you their spreadsheet they are using. Also, hard money lenders want a scope of work filled out prior to funding the deal so this is a good little hack to get one as well. 

I have read this one years ago and it is a great book by a very successful guy in the space! You should read it for sure, and as you said it has been awhile since it was written so pricing has changed a lot. I would look at this venture as some type of vocation (I.e. plumbing, electrician, framer). You can read a book and multiple books, but unless you are out there doing it (I.e. getting bids and getting contractors to truly get you an exact estimate) you will be far off from the numbers you want and may even lose money on the flip/rehab.

The best advice I would suggest in my experience is that you should get into the line of work by either partnering with someone or working with someone on some projects prior to going into a flip on your own. I have an example, there is a client that I work with and he had never flipped before. He left his job last year and my team found him a property to flip. We worked him through the process, brought him a contractor, and gave him all the resources along with giving him tips on layout and all. He had a successful flip, and sold it for a profit within seven days on the market. Now he has one under his belt he can go out and use that framework to do the next one and the next. 

The real life experience is the best option for learning and gaining the knowledge you need. 

Quote from @Matt Cook:

I would really get with a realtor that is in the area of that property and that sells a lot of homes to comp the property on what it can sell for after the remodel. These numbers on their access to the MLS will give you the best evaluation to what you can sell it for once you are done. You could also get a couple different agents in the area to get you good comps on what to sell it for and compare on what they say the out price can be.

I would say.. can you save the tub and re-glaze and redo the tile on the wall can save you $1,000 or more just on materials and labor.. It still pops and looks great! 

The other small hack... labor costs for tiling.. If you use small tile verse big tiles, the big tiles will save more in labor costs. 

You need to be thinking outside the box on a deal-by-deal basis. Be an area expert on contracts, zoning, value add components, contractors, and so much more. 
Bought a place a few months ago on market while doing a 1031 exchange.. The property was on the market and went into escrow 2 other times. We got it for $105K off the appraised price, and 45K off the list price with 12K back at closing. 

This place has two SFRs on a lot, needed both to be fully remodeled with AC placed, windows and a lot of other stuff. The property will be cash flowing as soon as the remodel is over and has space for one large extra unit on the lot or two small units on the lot. These are deals that people can find on and off market, they just need to be creative on what they can do to the property to make the deal a deal 

There are many, they need to be market specific.. For example, this can be adding square footage, adding an extra unit, or adding a pool in a STR market/luxury market. This does not mean you add something that is a luxury in a market that it does not fit. You need to really know what is selling, why it is selling and what to do with that house/townhome/condo. That is why I believe IMO that opendoor (old zillow flipping homes model) does not work. They buy properties, do not know the area put substandard upgrades in the property then sell them for market value or try to and the property sits for a long time. These deals end up sitting for a long time and they lose on it or breakeven. Yes, there are times they do win and make money, but not on a frequent bases in my experience.

I agree with 100% on that for sure! Thanks Bruce! 

 Yes, you are right; that is true for California.. Not sure where Ana, but every state as you know is different. For example North Carolina is $40,000 or less, Texas there is no limit, and so on. I just was giving a rule of thumb (framing was what I was bringing into the convo adding sf/adding bed/bath etc. without stating framing). But I did not want to give specific examples with no context on a location for her. 

What I see a lot of people do is overthink it and then either stop in their tracks, or wait for years to get started due to the overwhelming data that they get on what they want to do. Giving them a laundry list of items will typically just overwhelm them and create more confusion instead of giving them a smaller step process to get more confidence to get the ball rolling and then they can get into the weeds on their state when they get the contractors out there, have local bids come in, and dial in their plan. 

I have had contractors just do a small list on a paper napkin, and some do something on a word document. The other contractors that I have worked with gave me a full scope with detailed line items of what will be fixed, how much the labor is and how much the material is going to be. We review and negotiate then sign on the line. 

I would not ask for a template from anyone, the better the contractor the more professional the contractor the better they are with documentation and getting things in order for templates. If you really want one then I would have one drafted by an attorney to make sure you are square on all issues, liabilities, scheduling etc. 

The high quotes for the electricians will be way cheaper than having your handyman do it and it causing damage, causing a fire, or even worse causing a fire later when someone is living there and that person/persons getting hurt because of the work being done by an unlicensed worker doing the work. 

The 6 things I use licensed workers for.. Electrical work, plumbing, foundation, windows, roofing, and AC/Heat. All the rest can be subbed out unless you are doing a full remodel by adding square footage to the house/converting a space (bath/bed etc).