Involved In Real Estate · INLAND EMPIRE, SO CAL · Member since 2011 · 19 posts · 6 votes
I just have a general question to those flipping properties in the Southern California area, primarily in the Inland Empire. What is the average amount of days,weeks, months... It is taking to Purchase, rehab and unload your properties to an end buyer?
Investor · Sarasota, FL · Member since 2008 · 18k+ posts · 17k+ votes
14y
Originally posted by Joanne Basecki:
Is it a good idea to offer a bonus for meeting the agreed upon timeline, i.e. if the roof is to cost 5k i could offer 6k for the on-time completion?
If the roof cost is $5K, I would pay $5K for on-time completion. I'd pay less than $5K if they miss the deadline by any significant amount for reasons under their control.
This is why you should have a penalties built into your contracts.
Real Estate Investor · Virginia, DC &, MD · Member since 2008 · 261 posts · 71 votes
14y
I am not in California, but we settle on REOs in 3-4 weeks, take 4 to 6 weeks average for rehab and usually receive an offer in 21 days or less. Then you wait 30-40 days for the buyer to close. Take $$ and repeat process.
Investor · Charleston, SC · Member since 2011 · 606 posts · 413 votes
14y
Jeff,
I think in general it depends on the area and the price tag of the house. The higher the price typically, but not necessarily it takes longer to flip since there are less buyers available in the higher price range. The best thing to do is focus on an area where the house price tags fit the median income in that area. These houses sale faster since the buyer pool is bigger.
Typically, it takes 1-3 months if you target a hot area with cosmetic rehab.
Involved In Real Estate · INLAND EMPIRE, SO CAL · Member since 2011 · 19 posts · 6 votes
14y
Jim,
Thanks for the breakdown, definitely helps out. Appreciate your insight.
Randy,
Great point, and I've been doing my research... Definitely learning my market. Definitely looking to purchase in good locations that are affordable and targeting first time buyers.
Overall, just trying to get a good idea of how long this I taking those that are already in the trenches, so that I forecast correctly and be prepared for worst case situations, especially if I'm working with OPM.
Investor · Rancho Cucamonga, CA · Member since 2008 · 1k+ posts · 684 votes
14y
Originally posted by Jeff Sitti:
Am I assuming most of the time it's taking is due to the amount of inventory and waiting on offers... Or is it due to rehab ?
I would assume 30 days on market and a 45 day escrow. Since many jobs I have to pull permits (that takes 30 days) rehab is another 45 days. That is 150 days right there.
Residential Real Estate Agent · Chandler, AZ · Member since 2009 · 1k+ posts · 928 votes
14y
I don't have the details like JScott but I run the numbers assuming 120 days and I try to perform in under 90. These are fairly major rehabs. Cosmetic rehabs I run the numbers with 90 day max hold.
Involved In Real Estate · INLAND EMPIRE, SO CAL · Member since 2011 · 19 posts · 6 votes
14y
Thanks guys for sharing your breakdowns and averages, definitely a lot more to consider, especially what you mentioned Steve in terms of the permits, because I will also be working close to your area in san bernardino county. This info definitely helps me forecast and project my numbers for worse case senorios.
Flipper/Rehabber · Louisville, KY · Member since 2008 · 1k+ posts · 1k+ votes
14y
You also need to consider how actively you will be working the flips. Is it your full time or part time job?
You assume that contractors will work just as fast if you are there vs if you aren't, but they don't. If you are a part-timer like me who visits the site only 2 or 3 days a week, things move much slower than if you are there every day.
I always shake my head when I watch these flip shows on tv where they push, push, push and act panicked if it takes a few extra days, cause that is not my style at all.
But if you don't do that, you can find these things dragging out much longer. I take 3 months to do rehab that others would take 1 month. I plan for it in my numbers but just be aware that it is very easy for these time lines to balloon fast if you are not constantly pushing harder and harder.
Investor · Sarasota, FL · Member since 2008 · 18k+ posts · 17k+ votes
14y
Originally posted by Joanne Basecki:
Is it a good idea to offer a bonus for meeting the agreed upon timeline, i.e. if the roof is to cost 5k i could offer 6k for the on-time completion?
If the roof cost is $5K, I would pay $5K for on-time completion. I'd pay less than $5K if they miss the deadline by any significant amount for reasons under their control.
This is why you should have a penalties built into your contracts.
Carpenter · CA · Member since 2008 · 17 posts · 7 votes
14y
I just got into my first flip, so I'll add my 2c...
I have worked doing remodeling for 5 years so I have a good handle on the process, time line, and order of operations. BUT, I still work for someone else so I've been in the house on weekends and some nights to complete work on my own, as well as checking on the subs I hired.
I planned for 3 weeks, and it is looking like 5 will be realistic, but I decided to stop panicking pretty early into this. Honestly, issues with overlapping work inside and getting the hardwood floors refinished has added at least 10 days that I had never expected. As has been mentioned previously, not being there full time can add several days to your budget as well.
In my neighborhood (Gardena, CA), there are rehabbed houses that have been on the market 90 days +, and there are a few that went under contract within 60 or so.
Ultimately I decided to go a little over budget, and get this house upgraded to a point that it would be a no brainer for my potential buyers, when compared to the "competition". I figured a little extra money and time on the front end would save me from chewing off all of my fingernails in February when that house had still not sold. I will post a new thread with a breakdown when the house is sold.
Austin, TX · Member since 2013 · 24 posts · 7 votes
12y
just wondering how you guys are flipping properties now since fha guidelines changed: buyer must wait for 90 days after last purchase. To secure that the equity is in the house and to justify that the "improvements" helped with the equity. Or something to that affect.
just wondering how you guys are flipping properties now since fha guidelines changed: buyer must wait for 90 days after last purchase. To secure that the equity is in the house and to justify that the "improvements" helped with the equity. Or something to that affect.
There is no FHA restriction anymore for how long a buyer must wait after the seller's purchase of the house. It used to be 90 days, but this requirement was waived back in February 2010. You will need to justify the price increase, and substantiate the new value -- this is generally done by the lender ordering two appraisals on the property.
Austin, TX · Member since 2013 · 24 posts · 7 votes
12y
Awesome! Thanks, J Scott. I just read the rules and it's extended until Dec 31, 2014, for all single family homes, not just foreclosure properties. It looks like government keeps extending it....Thanks, again!
Real Estate Investor · Williamson County, TX · Member since 2011 · 1k+ posts · 961 votes
12y
26 days for a flip? Wow. You must have quite a system down. So would the average flip include popcorn removal and re-tiling tub surrounds? i always seem to have something weird. Current house had a pocket door in the back of the master closet behind a garment rod. The pocket door room was space taken from the garage and it had nothing in it but they had added a gfi outlet. We think it was a grow room. We went ahead and took down the wall and made it one big closet. And reused the pocket door to separate the master vanity from the bedroom. Why did they do that in the 70's, to make the master seem larger? so our rehabs take forever.
26 days for a flip? Wow. You must have quite a system down. So would the average flip include popcorn removal and re-tiling tub surrounds?
We do have a good system...it involves using the same contractors, materials and scope of work to the largest extent possible. It also involves having well thought out and well documented systems and processes for each aspect of the deal, so there are fewer bottlenecks.
We typically do full cosmetic renovations. We always remove popcorn ceilings, and if a tub and/or surround isn't in good shape, we'll replace with a two-piece fiberglass tub/surround (unless it's a higher-end property).
For properties where we're strictly doing cosmetic work (paint, flooring, cabinets, appliances, light fixture, plumbing fixtures, hardware, etc), we're generally much quicker than 26 days. For properties where we're doing structural work and/or reconfiguration of spaces, it will generally take more time. So, it averages out.
Also, in some areas, it takes more time for permit approval/inspections, which adds to the overall timeline. The key is to develop systems and processes so that your contractors don't have to ask lots of questions and so you don't have to make lots of (time consuming) decisions on each project. Also, by having systems in place, your contractors should never be waiting for materials and the house should never go a day without work being done. Proper scheduling will allow multiple trades to work together without impacting each other's work.
Waldorf, MD · Member since 2012 · 43 posts · 5 votes
12y
I agree, a good system and planning are crucial. I'm currently doing a project in Baltimore and my framing guy has come in at a higher price than expected as a result I'm now out there finding/booking other framers but if I had planned other options before hand I would not be wasting time, not fun when u paying high interest to a HML. So have a system, plan ahead and have 2-3 options before hand and your rehab time will be more manageable.