All Forum Posts by: Ritch Bonisa

@Andre Watts A vast majority of the time, the wholesaler's idea of rehab costs is absolutely worthless.  What you have to do is find out how much the property is actually worth in it's distressed state.  

I would say, YES, you need a contractor to work with to put together a scope and cost ranges BEFORE you sign anything.  If you have the know-how, then do it yourself. 

Evaluating your deal is the key to success.  Here's how I do it:

• Get good comps on the property.  
  • Don't use the seller's comps.
  • Make sure you consider age of the home and anything else that provides a comparable.  Ex. You can't compare a house that has a garage with one that does not.  
• Find a retail target (a few recent comps that you can emulate). Create a target value for the property.  
  • Verify the retail probabilities with a trusted retail realtor. 
• Work up the scope of work with the rehab costs.  
  • Ask the question - what type of rehab will it take to hit the target?  
    • How much will it cost?
• Add in any holding costs, selling costs, taxes, anything else. 
• Now, add in the return you require to make it worthwhile. 
• Now you know what the property is worth to you. 

• Don't pay more than what it is worth to you.  
• It's always ok to walk away.  
• Your success is determined by the purchase price of the distressed property.
• Do Not depend on a glamorous retail sale at the end.
• Do Not think you can "make" the rehab fit, or force it to work.  

Yes, this all needs to be done very quickly.  If you lose the opportunity because you couldn't move fast enough - then get better.  Don't kick yourself for not rolling the dice. Mitigate your risk at every opportunity.  But don't ever buy without knowing what your deal really looks like.  Don't let someone else make you hurry. 

If it don't make dollar$, it don't make ¢ents.

Hope that helps a little. 

Welcome @Samuel Soto!  I'd be happy to discuss Indianapolis with you.  I've been very active here.  Let me know if I can help!

Best Wishes!

@Daniel Mendez Just make sure you totally drill down the rehab costs BEFORE you buy.  Don't believe the seller's rehab numbers.  

Hi Thuy,

Just make sure you understand any rehab costs before you buy, and make sure you get good comps.  Many times the comps you get are older sales or there is something within that does not translate into a good comparison. 

Best wishes!

I don't know if anyone has read this article from indystar.com yet. Just wanted to post it and share. It is all about the Morris Invest Oceanpointe situation in Indianapolis.

https://www.indystar.com/story/news/2019/03/26/fox...

Also, here's a local news piece on it.

https://fox59.com/2019/03/26/ex-fox-friends-host-s...

I don't know if anyone has read this article from indystar.com yet. Just wanted to post it and share. It is all about the Morris Invest Oceanpointe situation in Indianapolis.

https://www.indystar.com/story/news/2019/03/26/fox...

Also, here's a local news piece on it.

https://fox59.com/2019/03/26/ex-fox-friends-host-s...

I don't know if anyone has read this article from indystar.com yet.  Just wanted to post it and share.  It is all about the Morris Invest Oceanpointe situation in Indianapolis. 

https://www.indystar.com/story/news/2019/03/26/fox...

Also, here's a local news piece on it.  

https://fox59.com/2019/03/26/ex-fox-friends-host-s...

@Jason Y. Keep in mind on this idea that a broker/agent won't have actual nuts and bolts construction knowledge and will be very limited in how they can help you get contractors to perform in the way you need.  In essence, this is a one shot deal, so they will have no control mechanisms. 

A PM would be your best bet, but still may lack construction knowledge.  Probably be fine with 10-15k type rehabs. They also may have better long term contractor relationships. 

@Ryan Evans If you don't have your brokers license - get it as soon as possible.  Yes, go ahead and wholesale to build capital.  Use your construction knowledge to provide value and find workable deals for your clients.  

Once you have the cash:

• Find your own properties with your new found skills in property lead generation. 
• Use your construction knowledge to understand scope of work and rehab costs. 
• Use your broker's license to have access to real market statistics and info. 

Having the cash, construction experience, & access to the best market information  is golden.  Having all of these together allow you to act very quickly while minimizing mistakes.  Realistic deal evaluation within quick time frames is probably the single best thing you can have to be a successful investor. 

Anyone can go out and get a brokers license.  Then it can be a time consuming and sometimes painful process to learn construction.  

You already have the understanding of rehab costs.  Now get the license and experience and you'll be a lethal weapon. 

@Courtney Rollins Keep doing what you are doing.  You will get better at it. 

I agree with @Frank Geiger about most investors having a construction knowledge gap.  The reality is - if you want to play in the distressed property arena you have to be able to evaluate whole deals, set target ARVs and zone in on rehab costs.

@Patricia Steiner said it well in terms of risk-reward analysis.  You need a consultant not a sales person.  You need someone thinking strategy and also someone to tell you, "NO, don't do this one."

You might have to pay a contractor at times.  Just keep being fair and respectful of others' time.  You will find like minded people to partner with.  

If it don't make dollars, it don't make cents!

Best wishes!