All Forum Posts by: Chris Skjolsvik

Hey Matthew,

I live in Andover and previously lived in Blaine. It sounds like we have some things in common... My wife and I have a soon-to-be 3-yr old, and a 1-yr old. I also am suffering from analysis paralysis.... I have been looking to get into fix and flipping and then fix and holding but I haven't purchased anything yet. Truth be told I spent a lot of time looking for deals through the MLS in 2014 and didn't find anything where the numbers worked with my finances or experience. I don't know if MLS deals are scarce and more creative methods are needed (yellow letters, driving for dollars, etc etc etc) or if the current market is not conducive for flipping in the price range I've been looking (175k - 300k ARV).

FYI - there are several investor groups in the Minneapolis area.  One of the free ones is TCREI (Twin Cities Real Estate Investors, look on meetup.com) which is organized by Pine Financial, a hard money lender.  They provide a different topic of education the 2nd Tuesday of each month (today!) at 6pm at Grumpy's in Roseville.  It's a good place to network and learn and there is very minimal sales pitch from Pine.  Let me know if plan to attend and we can chat.

@Raj Gandhi , welcome to BP! I live on the north side (Andover) but have friends in Woodbury and can see why it would be a great place to invest. We currently own two rentals (both converted from primary residences) and plan to move each into their own LLC shortly. The plan is to do so with a quit claim deed but I haven't done enough research to know what all is involved.

Hi Blake and welcome to BP! There is a free meetup / happy hour organized by Pine Financial Group tonight.  Look up "Twin Cities Real Estate Investors" on meetup for more info but it's at Grumpy's in Roseville starting at 6pm.  Let me know if you have any questions.

Chris

Welcome @Steve Wald from a fellow Andover, MN resident! I'm fairly new to the site and have been busy networking at some of the MN based REI meetings. I currently have two rental properties and am looking for my first fix 'n flip property. I don't know that I have much to offer at this point but I'd love to network and discuss the process of breaking into this field. We should meet up for a coffee at the Bean or a beer at Beef's if you're interested....

Hi Jedd,

I use a Google Voice number for my real estate business.  You should be able to get one with your local area code and it's free!  Let me know if you have any questions.

Chris

@Todd Plambeck, thanks for the response.  The home is 32 years old (built in 1982... when MTV still played music videos :)  ).  Admittedly the breakdown isn't ultra precise as I wanted to see if we were even in the ballpark before getting much more detailed.  The estimate did include:

Exterior:

- New trim around windows

- Repair of one window (glass was cracked, looked like a baseball strike)

- Deck repair (there are two decks, one off the master suite and one larger deck off the dining room.... both need minimum of power wash and paint)

- ~$1,500 in lawn care, shrub trimming, tree trimming (it was pretty bad but would look amazing with some care) (this was my estimate outside of the GC estimate)

Interior:

- ~$3,500 for demo (my GC actually thought $6k but hires it out to 1-800-Got-Junk and recommended that I could find a less expensive option.  This place would require two large roll-offs and several days to gut the house. (this was my estimate with input from the realtor who apparently does demo on the side)

- All new flooring (combination of carpet, laminate, vinyl)

- All new interior doors and hardware (6 panel hollow)

- New (matching) light fixtures

- Most or all new interior trim

- New counter tops with modification to remove partial wall and add breakfast bar to open space between kitchen and dining room

- Refinish existing cabinets

- New bathroom fixtures (vanity, sink, toilet, tub) in both bathrooms

- Likely sub-floor repair due to the significant amount of pet damage

The major areas that I didn't look closely at (because of the pile of junk in the way) but would certainly need to if I was considering this include the mechanicals (AC compressor appeared original), septic system, well, a closer look at the roof, and a closer look at the deck.  Any of these items would simply add to the rehab cost and considering where I already am at I didn't think it was necessary.  Because this is a wholesale deal and I need good numbers (for my financing) I'm guessing that someone with more experience and cash will probably pick this one up.  

Chris

Thanks @J Scott .  I have a spreadsheet that uses the same formula but rearranged to determine my max purchase price for a desired profit. The target profit was $30k making my max purchase price $99,620 (with the additional costs I included - staging costs @ $3k and hard money financing cost @ $11k).  Interestingly, that is very close to simply using the 70% rule although I wouldn't rely on it for more than a quick estimate.

I understand that I may need to adjust my desired profit based on the current market but don't have enough experience to know for sure.  I also want to make sure that my calculated profit is high enough to account for the potential mistakes I will make without putting the project in the red.  Your books have been extremely helpful as I try to educate myself as quickly and thoroughly as possible.

Hi everyone,

I've been reading, thinking, getting excited, getting nervous, etc about getting into real estate investing for almost a year. I've been attending local club meetups, created an LLC, have a partial team (GC, realtor, wholesaler contacts, hard money lender, etc) and finally looked at my first property to flip yesterday. Below are the details. I'm really interested in what you all think about the process and would appreciate any feedback.

Property details: This deal was through a realtor I met at a REI meetup. This realtor works with investors and this particular property was a non-MLS wholesale deal. The realtor adds 3% to the wholesaler's price (I don't know who the wholesaler is and the realtor obviously protects his relationship with them). The property is in Ramsey, MN which is a further-out suburb of Minneapolis that has many larger lots... this one being 0.9 acres.

Purchase Price: $134,400 (including realtor's 3%)

Year Built: 1982

Style: 4 level split

TFSQ: 2100

Beds: 4

Baths: 2

Garage: Detached over-sized 2-stall (could be 3 stall with larger door installed)

Comps (realtor provided comps plus info I could find for recent sales on Zillow) estimate ARV at $210,000.

I visited the property yesterday with the realtor, my GC, and my GC's "main handyman".  This was probably an awesome first rehab property to look at and get "initiated".  The smell of dog urine and unreal amount of junk piled up everywhere was almost overwhelming but I focused on trying to see the potential and actually really enjoyed the process.

So... the deal analysis:

ARV: $210,000

Rehab: $45,000 (this is somewhat of a "rough estimate".  If the deal looked good I would have done a more thorough review, septic and well inspections, and created a detailed SOW)

Purchase Price: $134,400

This "deal" is at 85.4% of ARV so I'm not looking further into it but learned a lot for my first property viewing. J Scott writes about the "100 House Rule".... I hope to find my first flip before looking at 100 houses, but I'm glad that I've finally taken at least some action and am viewing properties (I tend to get stuck in analysis paralysis).

What I've learned so far:

1. I need to rely on my GC for estimating rehab costs at this point but I'm making a strong effort to learn enough to filter through deals and only pull him in when there is potential so I can have more scheduling flexibility and don't burn him out looking at deals that aren't good.

2. Trust my numbers.  My realtor is trying to tell me how good of a deal this is.  He's also telling me that I'm trying to get too involved (learn too much) and that I need to trust my team.  I agree that I need to trust my team, but I haven't worked with any of them before and don't have the finances to make mistakes that could've been prevented with more knowledge on my part.  I'm currently contemplating my future with this realtor.

3. Looking at houses is fun.  My only experience looking at houses prior to yesterday was for my own residence.... totally different.  I really enjoyed checking out the property yesterday and trying to analyze if a deal existed and can't wait to look at a bunch more.

4. I'm rethinking my strategy of using realtors and wholesalers to bring me deals without doing any marketing.  I'm sure deals are out there without marketing, but I haven't seen anything very close to the 70% rule.  I did score what I think is a good domain name: www.webuyhousesminnesota.com and I intend to build that site in the very near future.  Any recommendations for a great web designer that someone just starting out can afford????

5. I'll never understand how people could actually live in those conditions with pet waste, piles of junk, and boxes of half eaten pizza everyone..... but I'd like to turn those properties into profits.

6.  I've got a lot to learn.

Thanks in advance for any replies and wisdom,

Chris

Dream Bigger Properties LLC

Atchut,

I have two rental townhomes that I use 33rd Company for.  They are a medium sized company and I've had a good experience with them.  I should note that I started using them when my wife and I first became "accidental landlords" and didn't want to be involved with tenants, repairs etc.  I am currently getting more into investing (flipping specifically) and if I decide to add more rentals I will definitely reevaluate.

Thanks,

Chris

I agree with @Tom Mole .  The upper deck appears large enough to satisfy most people's deck needs but without rough dimensions it's hard to say for sure.