All Forum Posts by: Joseph Zerfoss

Just wondering if anyone has experience with Ken Wade's "Housing Alerts" system. Is it for real?

Wow, talk about "bait and switch", I came here looking for a good fight! Yes, BP shirts would be sweet!

This whole discussion has been very helpful for me, thanks to all who participated :)

Let me see if I can sum up the various view points in a way we can all agree with (not likely, I know, but I'll give it a try).

Let's say I buy a house for $50k. It is non-financable and non-livable in its present condition. If I want to make a profit, I have to fix this. There is a minimum amount of work I need to do to be able to retail it to a new home owner. (I assume this is always our goal since we are rehabbers and not wholesalers.) The cost of this minimal rehab is never going to be part of my potential profit. Let's say the cost for this work is $20k. The first question is, what is the ARV on the house if I just do the minimum? For our example say I can sell it for $110k in that condition. So, less closing/selling costs and the cost of borrowing the money (just for round numbers say another $20k), I can expect to see $20k profit.

The second question is, what is the maximum ARV on the house I could reasonable expect to get? Again, for our example, say the max. ARV in this neighborhood is $140k. That means there is another $30k possible profit left in the deal. So, here's the rub: every dollar I spend above the minimum repairs had better either return more than dollar for dollar or reduce DOM. If not, it's coming our of my profit. So, if I can spend another $5k and increase the ARV by $10k, I should do it. But if spending another $5k only increases the ARV by the same amount, maybe I shouldn't, unless of course it has a good effect on DOM.

I would guess that it will always pay to do somewhat more than the minimum if only to increase the curb appeal and sell it faster.

Does this make any sense? If so, would you agree/disagree/don't care?

Will,

Thanks much! Where can I find appraisers?

Thank you all for your input, it is very helpful. Since comps are so important...what are your suggestions for doing your own "comping?" I have been using Zillow and Yahoo! Real Estate, as well as getting input from my agent. What else do you guys do?

My question has to do with how much more you can realistically get for a house with "wow" factor.

Say you buy a super-trashed house and plan to do a complete rehab. New siding, windows, paint, carpet, kitchens, baths, doors, trim, etc. The surrounding area is well-kept, low crime, good schools, etc.

Now, let's say that the average house of comparable size in that neighborhood, in decent condition but nothing special, is going for around $125k. If you make your house really stand out, i.e. custom cabinets, granite, all tile in the bathrooms, nice doors and trim, you get the picture, something that is a real cut above the other houses in the neighborhood; how much more can you realistically get for it? I guess the real question is; how much more can you get it to appraise for? If you want it to sell quickly you need your buyer to get their financing.

I am new to the game, although I have been doing rehabs for years...just not on my own properties. Any input from my more experienced friends out there in BP land would be awesome!

Andres,

Just another thought...having all that equity sitting in one property may not be the best way to go. If you can get a decent rate on the money you borrow, you can put that cash-flow to work in acquiring more properties. In that same two years you could potentially own several more properties, all cash-flowing and building equity too. :)

Andres,

It seems that you may be far better off looking for a private investor that wants to make 6-8% on money they currently have sitting in a lame CD or IRA making squat.