All Forum Posts by: Ronald Starusnak

Yes, existing house would have to be torn down unless the houses were to have a small yard. 

Hey guys, I have a home owner looking to sell a property. He is asking 95k but the house is completely gutted. He has all new windows in the property but not installed. We do all of the work ourselves so our rehab costs are pretty low but here is where the confusion comes in.

The house backs up to new development in a town that is highly desireable by high income individuals. The average house price is 300k-400k. My estimated ARV Was 190k but an experienced agent in the area who has 200 buy and holds said he isn't so sure the nicer houses would increase the value of the one I want to buy. He suggested the ARV would only be 130k.

We tried to offer the home owner 72k which would make our 70% formula work but he wasn't going for it. Obviously the prices on the photo below are zillow prices and not 100% accurate. The green highlight is the house we are interested in buying. We could buy all high end stuff in, new roof, fix the landscaping, nice trim and crown molding, nice stainless kitchen, new windows, new drywall throughout, etc. 

In your opinion and experience, do you think this house could fetch more than 130k? Thanks for your help in advance.

Tarik, I got your request on here. Could you please email me your contact? It would be greatly appreciated! Thanks! 

HUD and their servicing company definitely care about their properties. We could have a $20,000 invoice held up if this inspection report is not filled out correctly. The servicing company has an entire department that only reviews these inspection reports and they compare them with photos from in field crews. BLM is a group of great people, I wouldn't say this is HUDs fault.

I work on the other side of this in addition to being an investor. HUD hires a national servicing company. In Indiana it is BLM. This company hires local contractors who often times aren't as experienced as they claim and they are the ones who are filling our the PCR's. This isn't HUD's fault necessarily and they do specifically have themselves covered in these situations. The BPO and listing price is also based strongly on the PCR so, the property may come back up for a lesser amount once your issues are found to be true.

The price you have the property under contract for has absolutely nothing to do with what the buyer is paying. They're going to be buying from you because you gave them a good price they were comfortable with. Get them under contract to buy before you expose the price. The entire wholesaling industry exists because people want others to find them deals. Fix & Flippers often seek out wholesalers and they know the wholesaler is trying to make as much as possible. They're not going to squeeze you if they're experienced. 

Usually when wholesaling we work to get the properties for other fix & flippers. This means we need to consider their profitability. We use the 70% rule. This means, if the house will be worth 100k after the fix & flipper repairs it, they will need to buy the house for 70% of 100k, or $70k. Then they need to subtract their repair costs, so in this hypothetical, if their repair costs will be $10k, they need to subtract the repair costs from the 70% number as well.

This means the person we will be wholesaling for needs to get the property for around 60k to make a good profit. Depending on your market you can use a 15% rule or less. So the fix & flipper wants to pay 60k for the property, you need to figure out how much you want on the wholesale. We won't chase down wholesales under $3k. So that means you need to get the seller under contract for $57,000.

I agree. 

Can I get some info on a meet up on 2/2? I am in the Syracuse area, we do fix and flips and wholesale properties if our flip crews are swamped. All of our crews are in-house contractors. We don't do a lot of buy and hold but if you have any questions in particular I can help. I have a very experienced friend who does property management and handles over 200 properties right now, we also complete ongoing maintenance and rehabs for banks and government agencies like HUD, FNMA, FMAC, BOFA, PHH, etc. My friend who is a property manager would definitely be willing to give you as much help as possible. He teaches a creative finance course to realtors, he is an excellent broker.

Please send me an message on here. 

Hello guys, I am looking to ramp up our business. We have more than enough man power but our crews are sitting idly or working on other 3rd party tasks. We'd like to put them to work flipping more properties but unfortunately we only have $30-$50k to work with each month. So we are kind of stuck into only completing one flip per month or less if the market slows a bit.

We would love to have a HML that can fund some things for us. Either the home purchase or the purchase and the rehab. If you have any advice or suggestions, please post below or send me an email on here. Thanks!