Hi BP friends! Today I was scheduled to meet a wholesaler at a potential flip for walk through. Closing was to be on Monday 10/31. I have all of my ducks in a row to be able to have the contract assigned to me and close on Monday. As of this morning the owner has decided to refuse to let anyone in the property while they still own it. The wholesaler has assured me that they are still vacating the property. I have photos of the interior from the wholesaler and the home is about 30 years old in a great neighborhood. The wholesaler has estimated the home needs about $85,000 in renovations. He assumes there was some sort of a leak in the basement. We expect we will need to re-finish the entire basement, all new paint and flooring throughout, update kitchen and baths. The exterior is in great shape. (I have driven by already). While I have experience flipping, I haven't bought a flip without seeing the inside. Any suggestions from those of you that have? What are some of the horror stories? What should I also budget for?
I am not an experienced flipper, but I wouldn't go near it with a 10' pole if I couldn't do a home inspection. The fact that the owner won't allow anyone inside is telling IMO. Good luck....keep us posted!
I couldn't imagine every buying a property sight-unseen, unless either:
1. I knew for almost certain what the Scope of Work was; or
2. I was willing to lose money.
Is there enough meat on the budget in case the plumbing, electrical, mechanical and everything needs to be replaced? I just spent $25,000 on structural concrete work... if you find issues like this, can it be absorbed in the budget?
Sounds risky, but if it's a screaming deal that can cover any of these surprises, it might be worth rolling the dice.
This is not unlike people purchasing homes through auction sites and at the auction house (and from what I understand they might not even have pictures of the interior). Maybe try searching BP for the keyword "auction" and see what pops up. I think @Brian Pulaski has some good insight. Keep us updated on the outcome.
What's the purchase and ARV?
Have you done a lot of work with the wholeseller? Does this person have a good reputation? Have you confirm the cost of the renovation? Did you get good pics to assess the repairs?
There were many photos of the interior that the wholesaler provided. I have not done a transaction with the wholesaler yet but I have been to a few of their walk throughs and have concluded that they are rather close when it comes to estimating the budget/scope of work. In any event, this was too risky for us. Someone did end up bidding on it, I will have to keep a close eye on it to see how it plays out! Thanks for all of the suggestions and insight. On to the next one!!
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