Rehab or Rebuild for Newbie?

13 Replies

I'm working in an area in Denver, Colorado which everyone is tearing down existing homes ($100k - $300K) and putting up $800K - $1.2m homes. I haven't done a deal yet but I've found a few FSBO motivated sellers that haven't listed on the MLS. If I get these deals done I'm trying to figure out if I should just do a more traditional Rehab, or if I should try and go big and do a complete rebuild with an experienced partner. Is doing a complete rebuild out of my league?


Rebuild by yourself?  No way.  With a partner with a proven track record and having done a number himself?  Sure.

@Anson Young  hi Anson lol. 

@Austin Faux  i would consider going against the grain and do a complete rehab with all the bells and whistles. Buyers could see your house as great value without spending as much money or attract a buyer quite not in the 1.2 range. How fast are the rebuilds selling?

Originally posted by @Anson Smith :

@Anson Young hi Anson lol. 

@Austin Faux  i would consider going against the grain and do a complete rehab with all the bells and whistles. Buyers could see your house as great value without spending as much money or attract a buyer quite not in the 1.2 range. How fast are the rebuilds selling?

 I knew this day would come.... 

Time to form the Anson coalition with plans for world domination.

Based on you numbers you are talking about LoHi.  This is an area where I do 90% of my development right now.  The reality is without experience you will be beaten out by the people with more experience, and money.  I made what I thought was a strong offer on a package of 5 25' lots at 1.25MM in cash, and was beaten out.  250k per lot, cash and buying a package of 5.   Any lot that will support an 800k house will be 225k minimum, realistically 225-325k. 

Good luck, I say go for it whatever it may be.  Best decision I ever made was to get skin in the game.

Originally posted by @Brandon Sturgill :

@Austin Faux  why not wholesale/wholetail it?

 More money.  If we feel the need to wholesale I've got no problem doing that, but if I can learn something by rehab or rebuild with another good investor in the area then I think it's worth doing that.  Wholesale is definitely an option though. 

What's your experience in construction/project management? Do you have CASH on hand to do a deal? Basically, what tools do you have to contribute? Do you know an GCs, etc that can run a job for you?

I would start small and build up from there. 

I have no experience in construction, but I have a buddy that's a Construction superintendent for Shea homes.  I have a few money partners, as well as a relationship with a hard money lender in the area.  We've been negotiating the deal, and we should see if they accept our offer in the next day or so.  Then it will be go-time! 

Austin-

@Austin Faux How did this turn out? I am a newbie investor in Denver and just happened to stumble upon this thread. Would be curious to hear if you landed the deal, what the numbers were and where you are at now

Hi @Walker Hinshaw: nothing specifically came from this lead, but on the flip side I might have my first deal!  An off-market with about $80k - $90k in equity, great schools, lots of growth in the area too.  Just need to fix up the place, and add about 200 - 300 sq ft.  His asking price was just $2,000 over our MAO!  Getting excited!

@Austin Faux Great to hear you have an exciting deal in the works, especially here in Denver where it seems so hard to get quality leads right now. Good luck, I'm rooting for you!

@Anson Smith

 @Anson Young

 if that coalition happens, I'm changing my name... or can I just get a tattoo that say "my name is Anson"?

Originally posted by @Micki M. :

@Anson Smith

 @Anson Young

 if that coalition happens, I'm changing my name... or can I just get a tattoo that say "my name is Anson"?

 As I often say, and have now taught my 5 year old to chant:

"Do it!  Do it!  Do it!  Do it!"

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