My partner and I are looking for the right realtor to help us find our first flip in the Atlanta area. We have started the process of working with two other realtors, and it doesn't feel like it has been the right fit. Qualities that are the most important to be are being highly knowledgeable in fix and flips, being able to help estimate rehab cost, familiar with the 70% rule and what our maximum offer should be, responsive, and happy to work with a couple who is brand new to this and eager to get started. We are already prequalified through our HML and have a proof of funds letter. Time is of the essence for us, and we are looking for someone who is ready to start searching and showing properties yesterday.
Hey Shelby, I got my license last week, but I've been a broker in Oregon and Washington for 5 years. I work with investors and builders, and have access to a lot of off-market properties. I'd love to help you out if you're interested. I'm not with a brokerage yet, but I expect to be tomorrow (I'm meeting with Coldwell Banker in Buckhead at 1:30). Sound good?
I could be way off, but I think your expectations are probably too high.
I think it will be very tough to find who you are looking for. Not impossible but tough.
#1. Not that many realtors that are really versed in fix and flip in my opinion. We have about 200 agents in my office and I probably wouldn't trust more than about 5 to help me with a fix and flip.
#2. I never want to estimate rehab costs for a fix and flipper. Everyone has different ideas and budgets and who they are willing to use as contractors. Some people want 1st class turnkey high end finish contractors who are going to walk in and design/build/GC and give you an easy finished product for a cost. Some people can GC themselves and negotiate and hire all trades and purchase their own materials. Some people buy materials at Home Depot (expense costs, cheap quality), others know the secret places to get low cost, high quality from non-standard suppliers. Some don't mind using uninsured, local labor, for example that drink on the job and live in the house while the rehab takes place. So my estimate can be completely different than yours. Another example is I find first time rehabbers are pretty slow and that includes me. Speed counts. First rehab probably costs you more than #10 or #20. Also 1st time rehabbers tend to want to rehab to their home quality vs what they need to do to sell the house and make money. It's pretty hard to teach and just seems most people need to learn that as they go along. I often here stuff like I'll need to spend X on appliances...and I'm thinking no about 1/2 that where I shop, but they're going on what they spent in their personal home buying from HD. Read the BP book estimating rehab costs if you haven't already. You should be able to write your own quotes, don't trust anyone else to do this.
#3 70% rule is a good target, but my guess is you will be hard pressed to find 70% minus repairs these days or you won't buy anything. You have to get better more aggressive numbers. At least in my DFW market. I expect you'll have too many people competing with you that are willing to do it for less.
#4. Just to give you an idea, you'll probably need to sort thru 100 houses, make offers on 10 to get 1 and maybe not even at 70%. So even then with you putting in a lot of the work, it's a lot to ask of a realtor. Maybe consider paying some of their expenses like gas money or some kind of per offer fee to keep them motivated with you.
#5 Do you know your prices yet? You know a good deal when you see it? You're not running comps on every house? I don't know exactly how you get there, but I think you should be able to walk in a house, know if it is a good deal or not, ballpark what your rehab costs are going to be, and be able to come up with an offer price right there. You should know ARV is $200/sqft and this one is $100/sqft and your rehab is $50,000. One way to maybe get there is get in 100-200 open houses over the next month or two. 10-15 in your target area every Sat/Sun. Ask the person sitting there what they think a good sales price would be. If it has recent reno ask if they have receipts, ask if they have before/after pictures, ask what their budget for rehab was and what was the real cost to rehab...if they were over/under budget. Walk all the houses you see in the area that have contractors in them. Ask for cards, ask what they are charging for their work.
Keep after it. You'll get there. You can do it. It's just a lot of work and no one is probably going to hand it over easy to you. Drop them in your lap. Don't rely on anyone else for numbers. Know your own, if you want to stay profitable.