So my wife and I are starting our first deal ever, by starting, I mean the paperwork isn't signed yet but should start today.
The hardmoney lender we're using has a sorta fail safe in place to keep us from doing something stupid - probably a good thing for noob, right!?
We were looking at a 5/3 foreclosure here in Mobile, AL been there a couple of times scoping it out. Yesterday we met a contractor over there, after discussing what we wanted to accomplish, he stated that he wished he knew us a month ago. He met a lady last month that came into town after her mother's death and they (the kids) would be happy to sell the house for $40K and just walk away. Sure that there was no way she still had the house, he texted her, and to all of our surprise, they still had it...drove by, with our realtor, who was showing us the foreclosure. The house is in relatively great shape. It is a 3/1 in a nice neighborhood, 1025 sq/ft, great curb appeal, privacy fenced in back yard, and a roof leak. Incidentally it was raining when we went there, but the roof was obviously very old, but made the leak very evident. The ceiling wasn't awful so hasn't been leaking for long. Carpets are in need of cleaning, probably don't need replaced...but removed in one room and discovered hardwood in that room. That's really it. Estimate on roof is $9200 for architectural shingles, fortified, and patching the damaged area.
Obvious deep clean the whole house, paint the inside, new appliances in the smallish kitchen, floors, & roof for all in repairs, cleaning, & appliances of $14,725
Comps came back and should be able list and get $109K after rehab.
After purchase, rehab, closing & rehab costs, as well as hard money lender fees, etc. should be able to net $28K
AND out ZERO MONEY out of pocket except for maybe earnest money.
The only thing right now is the property is in probate, but the probate courts are STILL OPEN here, so am told, it shouldn't take very long to get that done.
I'm curious...I wrote all that to say...I'm looking for partners in my area (Mobile, Alabama) and or mentors - I've been looking at real estate for a long time and finally made the decision to JUMP in...also if there are questions or concerns about this flip...let's chat.
Congrats on your off-market find!
Roof quote looks high and the rest of the rehab budget seems low.
Feel free to contact me if you need to bounce some of your numbers or ideas off of someone.
@Eric Patrick Oden thanks for the reply...I will say my contractor shot me that quote on the roof and patch and said it may be a little over as he didn't have the exact dims on the roof...he didn't go remeasure it but would come down if he over-shot it. Hope my numbers are not too low on the rest, but have a little margin for error -
Is this the best place to connect? Would you like my cell or email - not done much except reading on here.
@Brandon Morris first deals are exciting. Question for clarity...are you still buying the foreclosed property and then the house from the "lady". How did you figure your rehab budget and roof price? I agree with @Eric Patrick Oden that roof price does seem a bit high and the rehab budget seems low. Did you have actually material costs? That is something easy to figure out; labor not so much.
@ Brandon Morris. I agree with the others on the roof. I’m a newbie as well and just purchased my first multi-unit this past fall. This was a triplex with a very large roof and many peeks and valleys. I paid just a little over $6000 and I too got the good stuff (architectural shingles and such...). As for some of the other costs, I have found great professionals on FB marketplace that have helped me keep costs down and have done great work. I was also able to get new stainless steel appliances for great prices. Just as we have to get creative on finding properties, we can be creative on the rehab too. Hope this helps!
Question, how did you find your hard money lender?
@Brandon Morris I’ve replaced 2 roofs on my rentals in Baldwin and Mobile, your roof quote is actually pretty good. I got 5 quotes on a 3000sqft house, best was $16000. I got 5 for a little 1500sqft, 2 guys didn’t show, best quote was $11,500. For some reason lower Alabama is very high on roof prices because DR HORTON is giving them so much work.
@Earlisha Dumas Could you connect me with your roofers and contractors in Birmingham?
@Richard Palmer , apologies for the delay. I sent you a message.
@Lan Raby can you share your contractors for any work? Every contractor I’ve hired has been a BAD hire in mobile:
**No show, horrible work, start/no finish etc
Sorry for the late reply. I submitted something in the past, but I guess it did not post. I have had success with Patriot Roofing... Did a great job for me. I also, have used T-Roy Roofing and they did a fairly good job. Also, I had great response and work from John at Alpha Roofing when a pine tree went through a bedroom.