All Forum Posts by: Bryan L.

I have my Realtor's license (and engineering license too, but have it "inactive"). My opinion - if you're going to be buying a lot of MLS-listed properties, being a Realtor is very valuable. Not only for the MLS access, but also for the access/networking with other Realtors. And, if you don't want to do Realtor work, you can refer those leads to a Realtor and earn a referral commission. I recently did that and made a nice little check from a lead where there wasn't enough equity to make an investing deal. Easy money.

Great question. I mostly buy REOs myself, so I understand this situation. I assume that it's listed on the MLS. As such, it's going to have a lot of eyes on it if the numbers are good. And someone else may snatch it up at a higher price while you are trying to get a better deal on it. Let me ask you a few questions?

Is this in a desirable location?
How risky are your numbers and this deal?
Is the house pretty much standard/typical or does it have something unusual about it that will make it harder to sell if you ever have to?
Is it a "hidden" MLS deal (I'll explain more later).

Basically, if it has anything about it that adds risks (bedroom in the basement, unusual layout, train tracks near by, etc), then I would try to get a better price. And if somebody else pays more for it, then move on to the next deal. Otherwise, if it's pretty low risk, in your preferred area of town, etc, then go for it and make a strong offer. One other thing to consider - if you are also a Realtor and will be making a commission on it, you might want to make a strong offer.

"Hidden MLS" deals. Sometimes I find REOs that I call "hidden" MLS deals. They don't get as much attention for various reasons. If it's a hidden deal, I would try to wait it out and try to get a better purchase price. "Hidden" deals are typically:

- Houses listed with 2 (or 1 or 0) bedrooms, when there's actually 3 (or can be 3 with very little work)
- Houses listed in the wrong MLS.
- Houses listed with the wrong street address.
- Some other type of listing error or mistake.

One other thing to consider. You said it's been on the market for only 22 days. You may not get a great discount with this low number of DOM.

As a non-profit, you may also be able to get special access to great deals on HUD foreclosures. Take a look at www.hudhomestore.com. Still, even as a non-profit, you will need to spend less than you bring in. Best wishes on your endeavors.

Can I ask a question, and I hope this doesn't offend you. But why do you want to make the properties handicapped accessible? Is there a business reason? Or, do you desire to help handicapped people? The reason that I ask is this: I often come across people who would "love to flip houses". And when I talk with them, I can see this sparkle in their eyes. They are excited. They are inspired. But the problem is this. They are missing the point. They don't really want to flip houses. What they REALLY want to do deep down inside is to use house-flipping as a mechanism for them to realize their dream of being artistic. Basically, what they really want to do is to be interior decorators. Desiring to help people is a great thing. But it can also be difficult to mix in with running a profitable business. I run into this all the time when someone wants to buy my houses with o-f, and I want to help them cause they just need a little help to get over the hump. But is it the best decision for my business? I'm just saying to be careful. If your goal is to help handicapped people, that's great. But you have to turn a profit, or you won't be flipping houses for very long.

For example, my friends who want to be interior decorators - they would lose a lot of money. I can see it in that sparkle in their eyes.

IF you are going to be buying a lot of MLS-listed properties, I highly suggest that you become a Realtor. MLS access, plus easy access to the properties, plus making a commission on the buy side, and saving commission on the sell side. Plus, the access to and networking with the other Realtors.

You can get some really awesome vinyl sheet material (on a roll) that looks a good bit like tile.

I really don't pay too much attention to the calendar with my rehab/flipping business.

Here's something about rehabbing: it's similar to regular construction or home building in a lot of ways, but can also be very very different. You will have to analyze and asses a situation and make a decision. For example, do I sand and paint these old cabinets, or tear them out and install new ones? This floor has a 1/4" step in it as we go from the living room to the dining room - how do we work with that with our laminate flooring? Do we try to feather in the difference, or do we put down a transition strip? The wall-paper isn't coming off the wall very well at all. Do we continue, or do we tear it all out to the studs, or do we go over it with 1/4 inch sheet-rock, or do we skim-coat it? That built in stove is functional, but very out-dated. Do we leave it or replace it? Built-in stoves are more expensive than regular stoves, so do we re-work the cabinets to set a regular stove/oven? That worker thinks this paint job looks good? Do I fire her now, or point out what needs to be fixed and give her one more chance? That old covered back patio area - the wood is pretty rotten. Do we replace it, or just tear it all down and have an open-air patio? Toilet and tub will not drain, what's wrong with the plumbing? That bath vanity is solid, but ugly. Do I paint it or replace it? There's a water stain on the ceiling. Is there an active current leak, or was it just not repainted when the previous owners re-roofed the house? That old paneling is really ugly. Do we pull it or paint it? There's 25 years of nicotine all over the walls and ceiling. What's the best way to remove that?

All of these questions (and more) come from just one house that I am rehabbing right now.

I did my first few rehab/flips while having a full time job. I would go by the work-site on my lunch break and after work. Then go to Lowes to pick up the stuff that the guys needed. And deliver it in the morning on the way into work. It's possible. But I also had some background in doing repairs and such and a great deal of back-ground in project management. A GC will help you out a lot, but will cost you more money compared to being your own contractor. Now that I have much more experience under my belt and have found some good workers, I don't go by the job-site everyday. But you need to have people that you can trust, and you need to lay out a plan for them. Give them a check-list. And give them some way that they can buy materials if they can't carry the materials themselves. Put them on your Lowes account if you trust them enough. Of course, you will be paying for their time while they are in Lowes as well.

When I first started, I developed my own deal analysis work-sheet. After a while and after I completed a few actual deals, I found that I could analyze a deal without the worksheet, just walking through the house. You will probably reach this point too. I've found that most basic foreclosure deals in my area are going to need 10K to fix (includes closing costs and carrying costs). Basic painting, flooring, and all minor repairs are included in this 10K. I then start adding other items such as replacing windows (250 each), roof (5K), HVAC (2500 to replace a unit, 5K to install unit and duct-work from scratch), etc, etc,. Then, I just work a conservative ARV times 0.7 and subtract my "repairs".