Paint after major repairs/modifications are done, not before, and those shiny new appliances can wait until almost last so they don't get damaged in the chaos.

Again it could be a reasonable cost depending on what all they had to do.There are multiple issues here.1.Most of the items mentioned for repair should have shown up on an inspection of the property PRIOR to purchasing.In my mind if you didn't get a inspection from a 3RD party inspector not affiliated with the company selling you the property then these repairs are on you for not doing due diligence.2.The other component is that this property manager has their own crew.I don't like that one but and would never agree to it.Sometimes managers also get referral fees for giving business to skilled trades even if they don't have their own crew.The problem becomes then instead of getting the best rate they have to pad it a little to give back to the property manager for the referral.So either way I am sure the property manager is reaping a benefit monetarily from it.This way they make more than the lousy 50 to 60 bucks a month managing a property.This is why I am not a fan of "one off houses" in an area far away from where I live.This is why I like owning apartment buildings.I can find a full time highly trained manager easily and they use systems and programs to control cost and everything is documented.Since they only focus on management and are not a broker/agent doing transactions and then handling "rentals on the side" my properties get the focus they need to be ran properly.It just sounds like you purchased wrong and then on top of that have a property manager padding fees with the repairs.REO agents used to do this with banks.They wouldn't make much commission on selling the little dumpy houses so would have their company do the trashout,re-key,repairs and charge full market for it.Eventually the banks caught on and choosed their own company to perform tasks and only let the broker list the property for sale.Sometimes that works and other times it doesn't as the broker or manager is now dealing with outside parties they can't control saying work was completed properly and it wasn't.If you haven't had an inspection of the property I would do it now to see what all else might come up in the future so you can expect it and plan for it.

Certainly agreed with Ibrahim on his comments...he should get one project and if it goes perfectly give him one or two more and see how those go before giving him any major volume....Is the contractor a GC?

Your concerns are well-founded.A major problem is that there are very few folks in these areas that can obtain financing.

On the other hand, the majority of the risk is passed on to the buyer if you're wholesaling it.

Before you explode like Starbucks, a few words of caution: Have a set amount of money in reserve for turnovers, repairs, vacancies and major issues.

I’ll be happy to supply numerous examples, as I receive these email distributions constantly from commercial guys.I return to the fact that it’s noteworthy that a large percentage (a majority at the other large Memphis company, per their site) of sales at large companies are completed using private lenders at interest rates you've indicated previously are in the 8.5-9.5% range.

Assume no major maintenance items, but allow for some minor items.

Of course every market/city is different but it gives you a good idea of what is flying with the major banks ,etc in terms of discount off list price.It would also be interesting to know what terms are being accepted as well.

It’s a major rehab, don’t misunderstand, but it should work out very well.