All Forum Posts by: Ian Ray

I also am interested.  Could be productive!

Homewyse.com will help you out a lot in future calculations.  Just a heads up

I love what you have done with that barn. There are a few old cotton mills in my area I'd love to try this with

I will have to catch a replay. But I am sure the information will be quality

I must say.  It is interesting to see the differences in opinion and approach when it comes to how people respond to a statement.  It never fails to elicit quality information on both sides of the line.  I love it.

@Jesse T.

That is always the key! At a good price.  Thank you for your input

 No, they actually haven't tried to rent it out at all.  They purchased it to rehab themselves, with their son as the primary worker.  The son moved after they completed the gutting and framing and the house hasn't been touched since.  As it is not habitable, and still needs a lot of work (wiring, insulation, sheet rock, etc), so they have not had much luck at the price point they were trying to sell at.  Interest dropped sharply due to the husbands intractability.  Now, due to being tired of holding it, the couple have become more open to finding the best way to move the property. 

I think it would be a great rental once it is done.  It is about 6 blocks from the local university. 

A partner and I are currently evaluating a property that we think is a great opportunity (at the right price of course) for us to fix and flip. Originally, we were thinking come in with cash to purchase, rehab, and then move the property.  Now, I am wondering if it wouldn't be smarter to attempt to secure the property with a portion of the cash we have available, negotiate seller financing (the couple trying to sell the house has held it for 2 years with ZERO income from it), rehab it, rent it out, and then sell as a turnkey.  

What is the consensus on this?

@Ray Jimenez, 

The best advice I can give you is to have some general numbers on hand with you when you go to view a property.  What the cost per square foot to repair this or that will be.  Such as roofing, tiles, drywall, etc.  Once you have those numbers in hand, and you assess what needs done and how much of it needs done, you can add up how much in renovation you will need to account for in the estimated repairs part of your deal.  

After you know how much your repairs will cost your end buyer, and you know how much you want to make for your assignment fee, you need to take those numbers and subtract them from the ARV. If you know who you are assigning your contract to, or what type of return investors in your area like, you will know how much they need to make off of the deal. Once you have that info, you know how much you can contract the home for in order for all parties to be satisfied.

When the seller gets anxious at you low balling them, calmly explain how you arrived at your number.  I like to start about 7k lower than what I actually plan to spend.  If they reject your initial offer, step in up just a touch, possibly ask them the lowest that they could take for it.  One technique you can use instead of offering more money, is offering a shorter contract period.  Start at 60 days and knock it down to 45, then 30, if you are confident you have buyers waiting in the wings to jump on the property.   A motivated seller, or someone selling an estate home, always loves faster money. 

I hope this helps.

I secured my first contract yesterday! Talk about a high.  I always knew I loved arguing, but now I realize I love negotiating just as much.  I thought it would be difficult, but with my background in construction, assessing the repairs needed to the property and the price I needed to secure the contract for was easier than I thought.  Also, haggling was fun!  Talked the seller down from 30 to 23,500.  Talk about a "win".  

I realize this is just the first step in the wholesale process, but you have to take the first step before you take the 2nd.