Handyman special vs. fixer upper

[Carl Hall]

So I came across a deal from a colleague in Marietta Georgia . He tells me he was able to get a property under contract for 32k. Repair costs are roughly 60-70k. The ARV is 160k. He feels as though this property shouldn't be for the average investor but more of a handyman or a contractor who could get supplies and labor much cheaper than your typical cash buyer. My question is how much more could a contractor/ handyman carve out of a deal like this? Could they possibly cut out 15-30k?

[Brendon Seeley]

Depends. Contractors typically have PRO accounts at material supply stores that give them somewhat of a discount on material costs. But your colleague may be referring to their ability to do much of the work themselves, saving on labor costs. Also, when you use a GC you are paying a premium for their managerial duties, this is so they can oversee subs on your behalf to get the job done and something they can save on if they did it themselves. If you have a relationship with a contractor I would suggest coordinating with them to do a walkthrough of the property and give you a bid. If the numbers make sense then the ball is in your court.