All Forum Posts by: Tom Scott

Thanks all for the advice, I have decided to focus on 3 main zip codes that make up the better areas of Gainesville. This should help me limit risk and at the same time get a pretty good size pool of perspective deals.

Thanks,
Tom

I am in the initial stage of finding my first rehab. I'm focusing my search on the MLS for the time being since I am taking it slow and trying to learn the ins and outs of my area. My goal this year is to flip 1 house and make a profit as a proof of concept.

Obviously the rehab business is based on taking houses that need some sort of work, cosmetic, structural or both, and making them desirable to buyers. That being said, most of the prospects I see are simply older homes that have not been updated for a long time, they typically have things like wood paneling, pink tile in the bathrooms and wallpaper. In general they are livable but just ugly and need paint, new bathrooms and probably a kitchen update. Are these the types of homes most are flipping, or are you looking for the really trashed out places that need a total gut and rebuild?

I realize anything can make money as long as the purchase price is right, but are these older out of date homes even worth looking at? I.e. is being out of date generally a big enough turn off to your average home buyer that a wholesale buyer like myself can get a good deal with the intent to rehab it?

Tom

The town I am searching for properties in is Gainesville, Fl., It's not a small town, but not huge either. Property values in the middle of the most densely packed zip codes (I'm focusing on 3 or 4) seem to be pretty similar when you look at price per square foot and some of the other metrics. Basically in these 3 or 4 zip codes you find mostly similar houses that only really differ in size (i.e. all have similarly sized lots, most are SFR's etc.). As you move out from these ares you still find really nice houses, but the values begin to fluctuate. Finding comps isn't necessarily hard, but you begin to get vastly different numbers for houses that are pretty similar.

Given that I am new to this and want to minimize my risk exposure on my first rehab deal, my first intuition is to just focus my search in the zip codes I can easily comp out and I know will limit my risk of basing my decision on bad data. I may even cut back to 1 or 2 zip codes to further reduce my risk but my fear is that I will pigeon hole myself into a certain area and slow down my progress. So my question is how focused is too focused?

Tom

Subdivided? Not sure legally what the deed restrictions are but pretty much everything around it is 10 acres or greater so cutting it in half would be about the best you could do and not make it an odd ball type property.

I've not made any moves yet and really don't plan to. I am going to watch it and see what happens. The sink hole is really the deal breaker for me. I just don't know how much it effects value. So far the bank is holding at their asking price of over $300K so I imagine it's going to sit vacant for a long time.

Tom

I agree the sinkhole scares the heck out of me too. I'm still going to pursue the property, but not very aggressively. I think I'll take a look at it with the realtor sometime during january. Right now the bank is asking 396K, nice houses with well maintained property about the same size appear to be selling for roughly 320K within the last 2 years or so. Obviously they are dreaming with that number so I think it is going to sit for a while. I may offer them 150K just to see what they counter with, the land alone should be worth around that with nothing on it. Oddly enough the place is almost identical to the property I own, just in a different area. Our place appraised for 265K when we refinance a few years ago so my gut tells me if this place was in good shape and looked good, I could get 275K for it easily but that's without a sinkhole issue.

Tom

Hi guys,

I stumbled across a property today that I think could be a good fix and flip candidate but it is a little outside of the standard fix and flip model. I haven't been inside yet but it is vacant and I got a pretty good look through the windows.

The property is in a rural area about 20 minutes outside of a decent sized town in North Florida. It's 20 acre horse farm with a 2000 sq ft house. The house looks to be in decent shape inside, with fresh pain and clean floors from what I can tell. All new appliances and the kitchen may have new cabinets. I can see some minor updates that need to be completed like ugly gold switch plates and out of date light fixtures, all pretty simple stuff. The exterior is pretty overgrown with weeds and trees, but the building exterior looks to be in pretty good order. The property has 2 barns that are usable but would need to be cleaned up and repaired a bit to make them acceptable. The whole parcel is good horse pasture that is fenced, though the fencing is in bad shape and will need to be repaired and repainted. The real kicker is that it had a sink hole repaired at a corner of the house back in 2007. All the records indicate it was done properly and no problems have cropped up since.

So here are my questions:

1. Being so rural comps are tough to find, how do you comp a property like this? How far do you go to find a property to comp it to?

2. How much does a repaired sink hole take away from the ARV? Obviously insurance will be more for me and the end buyer, but how much more?

Hi guys,

I stumbled across a property today that I think could be a good fix and flip candidate but it is a little outside of the standard fix and flip model. I haven't been inside yet but it is vacant and I got a pretty good look through the windows.

The property is in a rural area about 20 minutes outside of a decent sized town in North Florida. It's 20 acre horse farm with a 2000 sq ft house. The house looks to be in decent shape inside, with fresh pain and clean floors from what I can tell. All new appliances and the kitchen may have new cabinets. I can see some minor updates that need to be completed like ugly gold switch plates and out of date light fixtures, all pretty simple stuff. The exterior is pretty overgrown with weeds and trees, but the building exterior looks to be in pretty good order. The property has 2 barns that are usable but would need to be cleaned up and repaired a bit to make them acceptable. The whole parcel is good horse pasture that is fenced, though the fencing is in bad shape and will need to be repaired and repainted. The real kicker is that it had a sink hole repaired at a corner of the house back in 2007. All the records indicate it was done properly and no problems have cropped up since.

So here are my questions:

1. Being so rural comps are tough to find, how do you comp a property like this? How far do you go to find a property to comp it to?

2. How much does a repaired sink hole take away from the ARV? Obviously insurance will be more for me and the end buyer, but how much more?

p.s. posting this here to attempt to weed out responses from those with little to no experience. If it's too off topic, by all means move it to the appropriate section.

Hi all. I want to get a feel for how many on here actually make a decent living in real estate verses are just doing "OK". Obviously I realize we probably cover the spectrum from no real estate income all the way to huge real estate income. I realize the term "making a living" is pretty broad and I'm not asking for hard numbers on your income, that would be rude, but for me it would mean the ability to quit my job as an engineer and live solely off my real estate income while growing it at a consistent rate, maybe 10% a year. I currently do pretty well for an engineer earning a little more than most in my field. I'm not 6 figures but have the potential to be there in a few years if the right promotions come along but not much more is possible within the corporate structure in which I work. I know it can be done as others have obviously done it, but I'd like to know how common it is. I plan to do a mix of buy and hold and an occasional flip just for fun, but if I'm going to go down this road I want to know that with hard work the odds are in my favor of succeeding.

Tom

Hello all. My name is Tom and I just joined the site this afternoon. I've been listening to the podcast for a few months now and decided to bite the bullet and begin the journey. I live in a small town near Gainesville, Fl. with my wife and 2 sons. I've been interested in real estate for a while now but have been too busy working towards the typical nine to five job to really pursue it. Well, as usual, I have discovered the "regular job" isn't really what I want. So I am now on a mission to build an investment portfolio that will hopefully one day provide me with the ability to spend more time with the kids and less time in an office. I'm currently a project engineer for one of the local electrical utilities so I am no stranger to construction and project type work. Though I've done no traditional investing in real estate, I did make a tidy profit on the house I lived in in college and supervised the construction of our current home a few years ago. Over all, I'd like to think I have a pretty good grasp of how real estate works, but as always the devil is in the details. I'm here to find that devil and see if I can't make him work for me. The end game is a sizable investment portfolio that will generate a passive income stream with minimal work on my part but I would also like to try my hand at flipping a house here and there, as I have always enjoyed a project from time to time. I must admit I am a bit pensive about networking through this forum (I am a frequenter of forums, but typically remain pretty anonymous) but I'm going to give it a shot as the podcast interviews seem to be pretty open and legit. I look forward to learning from you all and perhaps I can contribute something at some point.

Tom