All Forum Posts by: Scott Swanson

Hi Bukola,

There's several things you need to let us know. Like what is your price range and budget? Do you have a "reliable" contractor to rehab the property? Will he give you a free estimate or will he charge you, to come up with the rehab cost/estimate? Are you looking for an A,B,C or D area? I don't suggest a D area for flipping. Do you know how to run the numbers, to assess weather or not it's a good deal? Do you understand that the amenities you add to the house, should coincide with the area? These are all very important things you need to know. Also, the market is very very tight right now. It's definitely a sellers market. We're struggling to find good deals for our investors right now. That doesn't mean there aren't deals out there! If you're strictly looking on the MLS, it may be next to impossible to find a good deal right now. However, you could get lucky and find something. You might want to join a REIA club near you. They are groups that typically meet once a month. They attract investors, wholesalers, realtors and other people in the business as well. They can be a great place to learn the business and to also network with others. I hope this helps and best of luck to you!

@Blake Wofford, You need to calculate ALL of your monthly costs. 1. Mortgage payment 2. Taxes. 3. HOA fees. 4. Insurance 5. Management fee 5a. Any fees you might incur for booking it. 6. Upkeep 7. Maintenance and maintenance in between each guest 8. Vacancy rate per month and any other expenses that you will incur. Alexander spelled out most of it. You also need to find out how much it will rent for and how often it'll "typically" be rented each month. Marketing can be the key to success. I'm fairly confident saying that the summer month's bookings will most likely be less than the winter months, but I could be wrong. Once you have those numbers, you can calculate your return. Find out all of the information you possibly can from others in the area. I did a very "quick" calculation and I used "general" numbers. But if your monthly expenses are somewhere around $2400 and your income/rent is somewhere around $4000, you're above a 10% return rate, which is good. If your expenses are more than $3k a month and the rent is $4k, you're on shaky ground! I hope this helps. Best of luck to you.

My comment might cause a firestorm but.....You can legally wholesale more than 1 property per year in Illinois, IF you know how to do it. 

Zach,

Ok, that makes more sense. I had your purchase price at $200k, not $125k. That's a huge difference! If the seller is willing to go along with it, it might workout for everyone. I'll have to look at the numbers again, but $125k purchase price seems to make it worth pursuing.  I'm not real familiar with closing costs in Pa; but $26k seems extremely high. What does the $26k include? In my state, it would run about $3200. Are you adding in realtor fees and also holding costs like insurance, electric, taxes, water and garbage? Please keep in mind too, that lumber prices have doubled, if not tripled over the last year. I had a builder tell me last week, that the lumber cost on a house he was going to build, went from $45 to $93k. That's a major jump in costs! Best of luck to you.

Zach,

What am I missing here? First off, I wasn't able to blow your "chart" up, to see the actual breakdown. But I added up your numbers and I must be missing something. Example: Let's say you buy it for $200k. Rehab costs = $145,200 and the ARV = $375k. So your costs, NOT including closing costs, holding costs and everything else, is already at $345,200. If closing costs are let's say....$10k, you're up to $355,200. Again, that's not including other costs involved. So your "initial" cost is $355k and the ARV is only $375k. I'm either missing something or this is not a deal. Please advise and good luck.

Dawn,

There's a heck of a lot more to this, than you might think. If you're going to fix and flip, you need a "solid" and honest contractor, to do the work. Do you have one? If not, finding a good one that does quality work, might be more of a challenge than you think. Also, do you understand how to "run" the numbers?" Do you know your market? Do you have an experienced realtor on your team? These are some of the ingredients you need, to move forward.

I would suggest you join a local REIA club in your area. They typically meet once a month and it's a great place to ask questions, become familiar with the business and network with more experienced people. Best of luck!

Joshua,

I've been wholesaling for many years now and I've never seen the market this tight. Finding good deals right now strictly on the MLS is almost impossible. So I wouldn't rely on your realtor at this point in time. Sellers in many states are now getting above their ask price, so good "investment" properties are at a premium right now. I would suggest that you find a REIA group in your area and join. These groups members, are usually either investors, wholesalers, realtors and/or others that are interested in the business. Networking with others might help you. Finding some real estate FB groups might help as well. But finding "quality" deals on FB, might be a challenge. Most wholesalers don't have a clue what they're doing and will say and do anything, just for a sale. So proceed with caution! But it's a tough market right now. Best of luck.

Jonathan,

The current market for finding "quality" wholesale deals on Zillow or any other similar platform, is in the dumps! Prices are high and good wholesale deals are extremely difficult to find right now. You may run a cross a deal or two on Zillow, but typically the good deals are gone within a day or two, if not sooner. So you would need to act extremely quickly. This is the worst market I've seen for wholesaling in many many years. But remember, all it takes is one! So don't give up. Best of luck to you.

I'm just curious. What's the reason why you don't want to invest in your area?

Dominic,

I could write a book on what your next steps are! Basically, you need to set up a team. It seems you already have a realtor and that's good. You'll also need a "quality" contractor, to do your rehabs. Finding a good one isn't as easy as you might think. Do some research, ask others that are in the business and get some referrals. Go see their work and take your time before you decide who to work with. One of things we do, is work with a "quality" handyman crew, as well as a contractor. His costs are les than a contractor and we use them for the smaller jobs.  I would also suggest you find a "quality" property management company. That's not as easy as it sounds either. You can find the best deal on the planet, but if you have lousy property management, it can be like flushing your money down the drain. Bad tenants can destroy your investment and can be a nightmare! 

Take a look at some of the YouTube videos that are out there, on investing too. Talk to other investors in your area. Google REIA groups in your area and join. These groups typically meet once a month and you can network with others. You can learn a lot about the business from networking with the people that attend these meetings. Learn as much as you can, before you invest. I hope this helps. Best of luck to you.