BiggerPockets


Identifying a Flip (what to look for)

Forum Powered By:

7 posts by 5 users

To participate in forum discussions, create a free account or login.

Alexander Budka

Private Money Lender from Palo Alto, California

Nov 13 '12, 01:58 PM


Hey All,

Im looking to flip my first property in what I see as a niche market. My first question is: how do you know what holds value? Secondly, how do you estimate repairs precisely?

Alex



Steve M.

Landlord from Hendersonville, Tennessee

Nov 13 '12, 03:03 PM
1 vote


How do you know what holds value?

I'm not entirely sure what you mean with the question?

Secondly, how do you estimate repairs precisely?

For me, I had to jump in with both feet before I fully knew/understood the cost. You could try having a GC come out and bid on what needs to be done prior to a contract on the house. Or if you wanted to act as the GC, bring in Subs to bid it out prior to contract.

I *thought* I knew what certain things would cost ... But as you can imagine, I lowballed most items on the checklist on the first flip. I now can fully grasp everything and I have bids from several different contracts (from electricians, to plumbers) for certain things.



David Niles

Real Estate Investor from Buffalo, New York

Nov 13 '12, 03:23 PM


Hey Alex welcome aboard bud.

As far as value, bottom line is, you need to know your market, that should tell you a lot of the story.

Estimating repairs is an art that if you are not and have not been in the construction fields will take time to learn, get some contractor quotes, ask questions and then take some walks around your big box home repair stores looking over materials and prices for what your current projects are.
There is no exact calculator for what each repair should cost, areas differ and quality of repair changes pricing too.

Rehabbers know, you make your money when you buy, not sell.

Good luck.



Brian Burke Verified

Real Estate Investor from Santa Rosa, California

Nov 13 '12, 08:25 PM
4 votes


This might sound totally ridiculous, but take your best estimate after doing your research, and double it. If you get a contractors estimate, multiply it by 1.5. Until you have done a few of these you will grossly underestimate the costs. After the final tally, you'll ask yourself, "where did all of that money go?" One of the most common reasons that most people never do a second flip is that they totally underestimated the costs on the first one.



Medium_praxisBrian Burke, Praxis Capital, LLC
E-Mail: [email protected]
Website: http://www.PraxCap.com
Have you heard my BP Podcasts? biggerpockets.com/show3 & biggerpockets.com/show76


Alexander Budka

Private Money Lender from Palo Alto, California

Nov 20 '12, 03:42 PM


Thanks everyone for your input. It looks like I have to get a hold of a few contractors now. I found a great deal and it lead to another great deal. Would you recommend wholesaling one?



Brian Burke Verified

Real Estate Investor from Santa Rosa, California

Nov 20 '12, 10:08 PM


If you don't have the resources to buy both, yes. If this is your first flip, don't attempt to do two at once. Complete one before trying a second one. Plus, by wholesaling one of them, you will get feedback during that process that will give you some insight on how other investors underwrite their deals. That can be a valuable learning tool.



Medium_praxisBrian Burke, Praxis Capital, LLC
E-Mail: [email protected]
Website: http://www.PraxCap.com
Have you heard my BP Podcasts? biggerpockets.com/show3 & biggerpockets.com/show76


Bill Gulley

Real Estate Investor from Springfield, Missouri

Nov 21 '12, 08:56 AM


As to holding value, look to the first rule of real estate;

Location, location, location!

BTW, you never know if it's a deal until you sell it if you're flipping. :)



(Don't Want to See This? Log in or Create a Free BiggerPockets.com Account!)

Ubg-book

Get the Free eBook from BiggerPockets

Get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks, and techniques delivered straight to your inbox twice weekly!

  • Actionable Advice for Getting Started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more!

Sign up below to download the eBook for FREE today!

We hate spam just as much as you


To post a reply or start a new discussion, create a free account or login.

Manage Keyword Alerts

View All Forums


"