All Forum Posts by: Robert Campbell

Me again from Belleville.  I can only speak from my limited but productive experience, but I'm not sure why the need to look at a lot of houses and get a lot of contractor quotes, it makes me wonder what the goal is exactly, but I dont know the whole story and am not making a judgment in any way.

What I do know is this:

-- You can filter through many properties online, and look at a small number in order to find one that has, the key word, value (expected sale price - (purchase price + rehab costs) 

-- -- Use Zillow, and use Auction.com.  Set up alerts with zillow so you get emails which can then be notifications on your phone, for various filters such that if something new comes on the market, youll get buzzed right away.

-- -- Focus on a few zip codes.  Use that in your zillow searches.  If I watched all of Southern Illinois, I would know way less about a specific properties value against other properties in the area, and have to do way more research on each one - the rule there (for me) is that there are deals with value all over the place if you know how to look, at least in my region.  You need to get a feel for what a property is worth based on a lot of data points you have absorbed, including crunching the numbers

How I look at / for a property:

1) Zillow alerts and daily Auction.com checks for three zip codes around me, sale price under 40,000

2) Check the 'Foreclosure Estimate', meaning 'sort of roughly ballpark what its worth' - is it a huge gap?  Foreclosure sale, 25,000 asking, Foreclosure Estimate 105k, for me i would then look more closely

3) Check recently sold properties right on the same street (most valuable).  Compare number of bedrooms, square footage, number of bathrooms, basement vs crawl space, garage, in that order.  Can't find one next door?  Zoom out.  Try the next street, the neighborhood, anything you can find - the more data, the more accuracy, and the accuracy at best will be only "good".

4) Zillow Price / Tax history - when did it last sell?  for how much?  was it in the past two or three years, or 2005 when the sale price would be absolutely meaningless in the current market?  Don't forget the "real estate crash".

5) Look very closely at the pictures, what do you see - water / mold? foundation?  The pictures will tell a story of what else your not seeing.  Look for bad, look for good.

6) Use Google Earth to see what it looks like outside / across the street / etc - sometimes very useful, sometimes not helpful

7) Go look at it on your own without a realtor from the outside

This is a just a quick list and is just my approach, back to work.

Good luck,

Rob

Absolutely - First I did a small one to test my approach out / work out methods and made about 10k after Capital Gains, and we are in the last week of the second one which will bring 30 - 40k...

I've been doing rehabs in Belleville this year...

All:

I did my first flip earlier this year for proof of concept.  17k purchase, 11k rehab, sold 45k (45k - 28k = 17k pretax profit, no realtor) .  I am finishing my second one, which is going to be about 80k all-in, expected sales price 120k - 130k, I paid for the properties and the rehabbing cash.

Because my current project is not sold, and I intend to continue doing this, Its time for me to address 1031 exchanges, whether to form an LLC or another entity, and how to properly tax shelter profits.

Should I call an attorney / 1031 place I find through google search?  Do a consult with a CPA?  I am hoping someone can advise on how to get started, and I will be listing my current rehab soon (target July 1st) and need to set up a 1031 now, if that's the right thing to do - I am worried about having ALL of the funds tied up in an escrow account and having a timeline on when I have to make the next purchase, basically not being liquid.

Please advise, hope everyone had a great Fathers Day weekend!

Thanks,

Rob

You can list your property on Zillow as a Fore Sale By Owner.  How come realtors don't want to touch it?

My approach is a little different than the other two responses so far, but I am only on my second flip and this approach may change.  On the last one, I put a For Sale By Owner sign in the front yard when we were about 75% done.  Hardwood floors were sanded / stained / poly'ed, kitchen and bathroom done, and importantly electrical / mechanical / plumbing up to code according to the list that came from a city inspection.

I put the sign up because I figured that serious buyers would be out looking for a couple of weeks, and I might have an opportunity to talk with potential buyers and get feedback on my suggested price.  Buyers a month later, when it is completely finished, might be a different group by then.

What occurred:

Purchase Price: 17k

Total Rehab cost:11k

Original Expected List Price: 60k

What wasn't done:Another 10k - Exterior paint, full yard / landscaping / fencing cleanup, basement cleanup, window dressings, and a number of small items

Another investor who had multiple rentals in that area saw the sign, walked the house, and we quickly negotiated a 45k as-is / walk away and take your tools price.  As a result I made 45k - 28k = 17k more quickly, without realtor commissions, with less risk / total committed dollars into the project, and purchased the next rehab project a couple of weeks later.

In short I agree its probably best to finish everything and then market the property, but I wanted to offer this example.  My current project just reached about 80% complete with a purchase price of 30k, 30k rehab, and expected sale price 120k+ and I just put the sign out yesterday - Perhaps I will learn not to do it that way.

I don't know anything about meth mitigation, but I wouldn't suggest contacting the previous owner.

This is what I left as a surprise for my main contractor who will be finishing the bathroom this morning - I use this site frequently, reading posts, and doing my own, but I thought I would share a little bit of humor.

Thanks,

Rob

A follow up question on this, do people have an opinion on price point of potential sale price that warrants staging?  In other words, if you expect to sell for under 100k, is it not worth it? 

Id really like to know color wall paint Dave Charron and Christine Wathne used with there grey and white shakers.

I have red brick features inside the house including the fireplace I want to leave alone, I want to use white shaker cabinets in the kitchen w/ a black granite counter, and I feel like I need to use something close to white, like a really light grey...