All Forum Posts by: Steven Tierney

Hello,

I'm interested in a few properties in Plymouth County, Massachusetts that are being sold at trustee/foreclosure auctions.  I know in Mass, that they are auctioned off on the front steps of the property, and that often times these sales are postponed for various reasons.  I also know that I need to come prepared and have already done my research on the property title, and do a drive-by to possibly estimate repair costs, etc.

Let's say I do my research and decide it's a "go" and I want to attend the auction and bid on it...  What should I expect at an auction like this in Massachusetts?  Do you often get to tour the inside of the property if it's not occupied?  Is it guaranteed that I'd have to be a cash buyer, or could I get a loan to purchase the property?  What kind of legal costs should I expect to evict if the people are still living there?  What kind of expenses will I incur during the closing/foreclosure process?

It's pretty easy to understand how to find these auctions, and that I need to physically be at one, but other than that, I have no experience of what happens AFTER you're the high bidder, and I'm sure it's different with every property...  I know these questions are rather open-ended, but  whatever information you can offer would be greatly appreciated.

Thanks!

@Shaun Reilly your feedback is much appreciated, thank you.

@Barton Wallace your quote made me laugh out loud!  Thanks!

In general - do any of you have interior gut rehab costs that you'd think were more appropriate?  This project was coming in at $75-80/SF obviously which seems high.  I saw a post from @Justin Silverio from a while back  where his self-gc'd project came in at around $43/SF (if I remember correctly) but I'm not sure what market he's in up there north of Boston and what his team's labor costs are that factor in to that...  I think maybe the south shore is a different beast?

Hi Everybody,

This was the first Fix & Flip property I've put an offer in on, so it was pretty exciting for me...  I posted a while back about a property in a South Shore town here in Massachusetts and the water damage and mold problems this house had, so if you're interested, that post is HERE.  Well, I went ahead and did my due diligence on the property by getting certified mold remediation costs, and then estimated rehab costs on my own (again, I'm a newbie) based on what demo/remediation was necessary, and lastly verified these estimated costs by getting estimates from 2 different GC's in the area. Here are the numbers I came up with:

• ARV: $375,000
• List Price:  $275,000
• Rehab:  $175,000 consisting of 3 story (bsmt, 1f, 2f) mold remediation / 100% first floor & 50% second floor interior gut of a 2,000 sf/4 bed/2 bath home.  The "put back" was to include mostly new plumbing and electrical, which were assumed to be junk based on burst pipes + mold/water damage (and to be conservative because the house was winterized), solid wood kitchen cabs, granite kitchen counters and bath vanities, stainless appliances, tiled baths, hardwoods throughout, 28 replacement windows,  interior (obviously) and exterior painting, 100 feet of fencing in the backyard, and a few thousand dollars for landscaping considering the yard consisted of dead grass and stumps.  All of the planned finishes and scope was to get the house back to being consistent with other properties in the area.
• Fixed Costs: (6 months, traditional renovation loan financing) $43,000
• Desired Profit (includes contingencies):  $50,000
• Initial Offer Price:  $105,000

After preparing and submitting the offer to the seller's agent, she told us that she wouldn't even submit it to the seller because there were already offers on the table "above $245,000".  My newbie thoughts on this are as follows:

• Seller's agent is playing hardball?
• Other buyers didn't do their due diligence and were underestimating repair scope
• Other buyers were going to do an irresponsible mold remediation / rehab in general
• My rehab costs were coming in too high either because I was getting retail pricing from contractors (and estimating it that way on my own) and/or because a lot of that work really wasn't necessary
• Mold repairs are unpredictable:  Maybe it really did need to be a full interior gut, maybe it didn't need to be.
• I'm wasting my time even thinking about this, I submitted the numbers that worked for me, they laughed at them, and I need to move on and not look back!

Anyways, I know in this business it's not good to waste time dwelling on things, so I've kept my search going.  But... this being my first go around I thought there would be value in getting everybody's feedback on what I may have done differently.  

Thanks in advance!

Hi @Lourdemir Aime check out this website:

http://www.easternmassreia.com/ClubPortal/ClubStat...

It looks like the next meeting is:

Thursday February 12th

Holiday Inn Rockland

929 Hingham St. Rockland, MA

Networking Starts at 6:30 pm

@Marc M. Oh yeah, there's definitely mold, a lot of it...  Pretty nasty.  The quotes I've gotten include air tests with lab results on all floors to ensure proper remediation.  It was so bad that the 2nd contractor to come in told me and my RE agent that we should leave the house for a bit as we had been inside the house for nearly an hour with no respirators or anything on...

Update:  I've now been in the property twice, plus I've had 2 certified mold contractors and 2 GC's in to look at the place to give some rough estimates for the work to be done.  I will be putting an offer in on this property tomorrow...

Hi @Dawn Anastasi I'm almost all the way through it.  I bought his 2 books 1 day after joining bigger pockets!

Hi everybody,

I finally viewed a property I've had my eye on for a while now here in Massachusetts and I am intrigued by it because of it's location in a coastal town with good resale values (I have a post going about the same property with a vacant adjacent lot).  Anyways, the house has a great layout, good stats in terms of SF/Beds/Baths, but the entire kitchen and adjacent rooms (or portions of them at least) would need to be gutted due to water damage and mold issues.  The house has been winterized, but before it was, a pipe (or 10) must have burst somewhere and there must have been water leaking happening for a long time before anybody saw it.  The sellers did a quick clean up job (debris removal, sweep floors) it looks like, but portions of the ceiling had fallen off, hardwood floors are swollen, baseboard moldings swollen off of walls, etc.  Anyways, the kitchen would have needed to be redone anyways in this house (early 1990's style) so the location of the majority of the damage isn't necessarily bad.  There are visible mold spots on a lot of the directly affected areas.  In the basement, there are a few drywalled partition walls and those are covered in mold too.

 I've contacted a few local mold remediation places to go out to the house and give me an estimate of demo/remediation costs so I have a ballpark idea of what it'd be so I can factor into my repair costs/70% rule.

Questions:

Does anybody have experience with this, cautionary tales, etc.?  Maybe this is naive of me, but I'm looking at using the mold remediation to my advantage because it justifies a lower offer for me for the property.  The house needs cosmetic updates anyways, so I would have already gotten a GC involved for those, and assume they will add the cost of "putting the place back together" into their estimate.  Am I taking the right course of action here?  Should I take the remediation estimates I get at face value, or should I bump them up by 25-50% or something?  In general - is this project too complex for a first time rehab property?

I greatly appreciate your feedback!

Well said sir!  I'm a newbie so thanks for setting me straight a little bit.

Well, so I googled and found the vacant lot owner's phone #...  Gotta love the Internet!  I left a message with the son and I'm waiting for a call back.  @Account Closed  this would be something I would negotiate after closing on the house lot... If it's even worth it.  Still nice to know if the owner is even open to selling it, just in case...  

The undevelopable lot is assessed at $18k, so what would a reasonable offer be do you all think?  All highly speculative, but hey, it's fun!