New Flippers, need some guidance/advice
Hello everyone,
So, we've seen SEVERAL properties and either the numbers didn't work our it was gone prior to us making our decision. How can we get this ball moving or is it just to continue what we are doing? Struggles below
We fould a realtor that has agreed to send off-market comps to us, and we'll list the property w/ her.
We are working with a realtor for MLS as well.
When we do see a property of interest, we are NEW so need someone to come out and give us an estimate on repairs prior to knowing if it's something we should jump on.
But.... one, two or both things are happening: our realtors are sending comps 1-2 days later (sometimes longer) and trying to coordinate for GCs to come out, it takes all well too long. If the property is a good one, it's long gone. We don't feel equipped to see properties on our own and give offer (MLS or Off-market) or to give offers prior to seeing it in general.
Any advice? Willing to answer whatever questions you have!
This is a common problem (especially for new investors) in our current economy. Professional house flippers know their market inside-out and have a firm grasp on pricing for material/labor. With this knowledge and experience they can write offers within minutes or hours and it will be difficult for you to compete against them.
In order to get your Realtor and contractors to share your sense of urgency you may need to compensate them for their time, regardless if you end up buying the property. Expecting them to drop what they're doing short notice to get comps or estimates is a big ask, unless they know you'll pay them for their expertise. I recommend you sit down with each of them and explain how you need this information FAST and find out what they would charge to provide it to you. It's not enough to promise them the listing/job if you get the house. That's pie in the sky.
In the meantime, if this is a strategy you intend to pursue long-term I also suggest you get your real estate license. Then you'll have access to the MLS and can run your own comps.
You may also consider wording the contract so you have at least 3-5 days to inspect the house. However, savvy wholesalers and many home sellers may reject your offer with this clause because they'd rather sell to an as-is buyer.
The good news is that you'll get better at comps/rehab estimating the more houses you rehab. Good luck Regina!
Hey Regina, Which market are you looking?
Also, how are you finding motivated sellers who are willing to sell their properties below market value?
Go for a cosmetic flip for the first few if you are new to this. Getting contractors to run around for free bids on a house you may not buy when they are already buried in work is not well managed time for them. Structural repairs are hard to bid as they are not known until they can see the full project.
The J Scott books and a little bit of practice on an open house can have you doing the bids yourself before you even step foot on the property. You can be writing an offer while everyone else is waiting to hear from their contractors.
I second @Marty Boardman's comments above. Sit down with your realtor and contractors and work out some type of paid agreement to reinforce the urgency behind your requests.
In today's competitive buying market, us investors have to be creative to acquire the best deals. Good luck.
Common issues with new investors. I often see this as putting the cart before the horse. You have some team members but not the experience or knowledge of your market or how to estimate rehab costs which puts you at a big disadvantage. You would be better served to learn the process to estimate rehab costs on your own and get your RE license if you are serious about making this a serious business for yourselves. Having MLS access will allow you to run comps on your own and immediate without the need to rely on others. It also allows you to rep yourself on the acquisition AND the resale increasing your spread in each deal. That said, you may have to give away commissions at times to get other agents to send you deals (which is fine).
Research here on BP in the forums how to accurately estimate rehab costs (there are many threads on this topic and I have personally gone into great detail on how its done properly many times).
Practice, practice and practice more on estimating rehab costs and exit values (ARV's). This will place you in a much better position to start making offers. Having deals being sent to you before you have this skill set is the cart before the horse mentioned above.
Maybe try and find off market proprieties, either on your own or through a wholesaler.