Towson, MD · Member since 2015 · 161 posts · 44 votes
Is it realistic to do a flip working a nearly full time job if I can find a reliable general contractor? I am preparing and researching for a local flip in Baltimore, MD in the near future. I can make my own hours for my day job, and I can be available in the mornings/late afternoons during the weekdays when needed to check on the property, but I aim for full time day job work in order to have enough to set aside for investing. Any input is much appreciated.
Real Estate Agent · Tuscumbia, AL · Member since 2015 · 47 posts · 26 votes
10y
We've flipped two houses while working full time. We didn't have a gc just a handyman and a helper. Our flips were mostly cosmetic though. Does your full time job have the flexibility for you to field a phone call or make one whenever needed? Could you get by the job site once a day at a minimum? Those are the type of things we've seen and had to do. Are you comfortable giving a key to a contractor or hiding one somewhere or are you going to have to meet them there every time and let them in to feel good about it. Do the hours of your job coincide with the hours of city people like utility and inspectors? There will be times where you will have to go and be there during the work day. It is stressful and requires a lot of plates to stay spinning but it can be done. We are closing on our third one in the coming weeks and I'm already working ahead to get things in place for when go time comes. I'm a high school band director by day so my job is pretty full time. Best of luck.
Investor · Richmond, BC · Member since 2013 · 316 posts · 133 votes
10y
- when you know you're going to be working full time, it's really important that you have a very good 'scope of work' in place with as much detail as you can possibly foresee as well as a pretty clear idea of the materials you're going to be using. Pick your paints, your floorings, your faucets, and your cabinetry at least before the work starts and even better, before you get a contractor to bid on the work. The more you can prepare things in advance, the more smoothly things will go and the more independently your team can go forward.
Investor · Richmond, BC · Member since 2013 · 316 posts · 133 votes
10y
Hi Angela
Have you read 'The step by step guide to rehabbing' post here? It's a good one. I remember you saying that you were doing a lot of good reading and it's a good one to add to the list.
On top of starting to get pricing for local estimates, you can start using your visits to properties to make room by room checklists so when you walk a property you'll get better and better at notation items to help with your estimating and the creation of your scope of work.
You might want to start checking out suppliers - don't forget to familiarize yourself with some of the used building suppliers in your area - Restore, etc. They can be a great source for certain items - sometimes it's the luck of the draw but there are some things you can pretty well depend on.
@Julie Brandenberger mentioned 'draws', meaning the portion of $ the 'bank' advances at a time - usually about a third I think - they'll want to know what things you're going to do in what order and how much it will cost - another reason you'll need to know it before you start.
You mentioned that you'd be focusing on properties needing cosmetic work primarily - it's a bit of a slippery slope - you need to balance between finding a property that isn't too complicated for your first flip but the danger there is that you're going to have some competition in that realm from both homeowners and other flippers - and sometimes the value that you add can easily be eaten up by holding fees, realtor costs, etc and you end up having worked for $1/hr. Or less. So just carpet and paint doesn't usually cut it.
And about price dropping for properties needing work - as long as you've got "subject to inspection" in black and white, you can make your original offer for full price to get their attention and then use every little blip on the inspection to drop your offer by thousands and thousands. And thousands. Once you have them negotiating, it's harder for them to walk away. As long as YOU can walk away. It's often said that "the first offer is usually the best one" and it's likely their realtor will be reminding them of that very thing.
Although that's not really relevant to the question I guess.
But just to reiterate, the more work you do beforehand, the more likely you'll be able to let the work proceed without needing to micro-manage. It's the running back and forth to the store that'll kill you when work's in process.
Towson, MD · Member since 2015 · 161 posts · 44 votes
10y
@Valerie Hiscoethank you for the tips again! I had not even thought down to what exact flooring, faucets, paints, and cabinetry prior to getting bids. I had read somewhere about the value of familiarizing myself with materials and costs at Home Depot prior to needing to get the rehab done. The scope of work description in J. Scott's "The Book on Flipping Houses" gave me an excellent idea about how much I need to be somewhat knowledgeable about in a house prior to consulting with a contractor. He really breaks down a house into its rehab categories really well. I figure the more I know, the more intelligent questions I can ask them when I meet with the contractor on the house.
I will also check out the post on "The Guide to Rehabbing Houses." I have J. Scott's Book on Estimating Rehab Costs. That will be next after Millionaire Real Estate Investor.
That is an excellent point about aiming only for properties needing light repair and higher competition for those properties. I have experience with needing asbestos removal and mold remediation, new boilers, roofs, etc, with other properties both personal and other family members, so perhaps I'm more open to a moderate fixer instead of the paint and carpet. Guess I will have to see what is out there first.
@Mark Brogan Thank you. I'm really getting down the importance of finding a strong and reliable contractor based on everyone's replies!
Real Estate Investor · Davenport, FL · Member since 2015 · 516 posts · 152 votes
10y
Go to Home Depot to the contractor's desk... ask for the manager.
Explain that you are a real estate investor and would appreciate it if he would help you open a contractor's account. (he has a quota)
Once you have that, you have just saved money on materials...
The way I do it is to have my contractor call in a list of materials to the closest HD... when he arrives to pick up, they call me, e-mail me the paperwork, and I approve using my discount.