What would you do to this house specifically?
FL · Member since 2016 · 912 posts · 107 votes
I'm thinking of taking out a HELOC to fix and flip this house.
http://cheaphomedeals.net/show_listing_details.php...
Judging from the pictures, what should I do to it?
What would it cost to fix it up, and what would the resale price be at that level of renovation?
Run these numbers for different levels of renovation, and that will tell you which one (if any) you should pursue.
I've never rehabbed a house before so I don't know what different levels of renovation are. I'm asking what you would do, like...
Update the cabinets? What would you do to the exterior?
If you updated the cabinets, how much could you sell the house for and how much profit could you make?
If you did the exterior, how much could you sell the house for and how much profit could you make?
If you blah blah blah...
These are the scenarios you have to run, and then determine which, if any, are the most profitable.
If you don't know how to do that, that's what you have to learn. If the business were as simple as someone on an Internet forum telling you, "Do this, don't do that, get rich," would you believe them? You shouldn't. It's not that easy. In fact, it's not easy at all.
You have to learn first, and then do the work.
For reference, BP has a great book on the topic...
@Patrick Philip, slow down and step back for a minute. You are getting a lot of good advice here. People are being polite and helpful, which is what you will generally find here on BP. But what they are politely telling you is that you are asking questions that suggest you don't (yet) know enough to dive in to rehabbing without really risking your financial hide. I don't mean to sound critical, but if you can't figure out what a place needs to get it into shape to sell or rent, then you can't figure out how much that might cost. Rehabbing is a lot of work. And while you can make a good chunk of money at it, it is even easier to lose a good chunk. The traffic light is blinking amber: Proceed with extreme caution.
@Patrick Philip, slow down and step back for a minute. You are getting a lot of good advice here. People are being polite and helpful, which is what you will generally find here on BP. But what they are politely telling you is that you are asking questions that suggest you don't (yet) know enough to dive in to rehabbing without really risking your financial hide. I don't mean to sound critical, but if you can't figure out what a place needs to get it into shape to sell or rent, then you can't figure out how much that might cost. Rehabbing is a lot of work. And while you can make a good chunk of money at it, it is even easier to lose a good chunk. The traffic light is blinking amber: Proceed with extreme caution.
Okay. But I need to know what I need to learn. I think the next step would be to visit houses with a contractor.
I would like to put tile floors throughout my houses. I'm not a fan of carpet. They should all have brand new appliances and fans/light fixtures. Then, there is the obvious stuff like updating FPE panels and polybutylene plumbing. I might know more than it sounds like I know. But then again, I might not. I know that shingle roofs cost about $2.43/square foot to replace.
How many square feet is your roof? How do you know? Does that include the price of the replacement shingles? If so, what kind? Do you pick them out and buy them, or does the contractor? How do you keep the contractor from charging you for 30 year shingles but only installing 15 year? Do you remove the old ones? Do you get a dumpster? How, and how much does it cost? What if there are already 3 layers old old ones? How do you know and what do you do if the boards the shingles are nailed into are rotten? And most important of all, how do you figure out what all of this will cost? @J Scott pointed you to a great reference book. Part of what it will do is help you by giving you a structure for estimating costs. But like he said, its hard. Its also complicated. Good luck.
Hello @Patrick Philip first id advise you to start with a flip that isn't so "intense" i guess you could say. This is one for someone a little more experienced. The price is wayyy tok high for the amount of work that it needs. You'd probably be lucky to break even after all of the repairs. But, to answer your question. Its a total gut job. You dont know whats behind those hideous walls, new kitchen, baths, flooring throughout, trim, light fixtures, doors, electrical, plumbing, siding/paint, furnace, water heater, landscaping, plus holding costs, interest, insurance and the list goes on. I think you'll be in for more than 25k. These are just some things that i see from the pics (not including the dreadful "unforseen"). You'd need to get an inspection. But all in all I dont think its worth it
Good luck
Where do you suggest finding light rehabs? Craigslist seems to be my best bet at this point.
Craigslist is probably NOT your best source as you'll probably keep coming across deals similar to the one you listed above. Driving around to find absentees is a good start. Maybe finding a whosaler that sales good properties. There is so much competition out there, that the good ones aren't just going to be sitting around waiting to be chosen. Their kind of a hot commodity. Anything worth having is gonna be work, but with persistence and dedication, you'll definitely get there. It'll come a little easier for you to find these deals once you get a routine. Pretty soon folks will be calling you with so many, that you won't be able to keep up! Dont give up
Good Luck
Hello @Patrick Philip first id advise you to start with a flip that isn't so "intense" i guess you could say. This is one for someone a little more experienced. The price is wayyy tok high for the amount of work that it needs. You'd probably be lucky to break even after all of the repairs. But, to answer your question. Its a total gut job. You dont know whats behind those hideous walls, new kitchen, baths, flooring throughout, trim, light fixtures, doors, electrical, plumbing, siding/paint, furnace, water heater, landscaping, plus holding costs, interest, insurance and the list goes on. I think you'll be in for more than 25k. These are just some things that i see from the pics (not including the dreadful "unforseen"). You'd need to get an inspection. But all in all I dont think its worth it
Good luck
Where do you suggest finding light rehabs? Craigslist seems to be my best bet at this point.
Craigslist is probably NOT your best source as you'll probably keep coming across deals similar to the one you listed above. Driving around to find absentees is a good start. Maybe finding a whosaler that sales good properties. There is so much competition out there, that the good ones aren't just going to be sitting around waiting to be chosen. Their kind of a hot commodity. Anything worth having is gonna be work, but with persistence and dedication, you'll definitely get there. It'll come a little easier for you to find these deals once you get a routine. Pretty soon folks will be calling you with so many, that you won't be able to keep up! Dont give up
Good Luck
I'm not going to drive looking. That's the wholesalers job. I just presented houses that I found from wholesalers and everyone is telling me they are bad deals.
How many square feet is your roof? How do you know? Does that include the price of the replacement shingles? If so, what kind? Do you pick them out and buy them, or does the contractor? How do you keep the contractor from charging you for 30 year shingles but only installing 15 year? Do you remove the old ones? Do you get a dumpster? How, and how much does it cost? What if there are already 3 layers old old ones? How do you know and what do you do if the boards the shingles are nailed into are rotten? And most important of all, how do you figure out what all of this will cost? @J Scott pointed you to a great reference book. Part of what it will do is help you by giving you a structure for estimating costs. But like he said, its hard. Its also complicated. Good luck.
I've read the book on estimating rehab cost. I read the book today about flipping. The only thing left for me to do is learn by doing. I see all types of "fixers" and "handyman specials" listed on Craigslist. If those deals from the wholesalers website were no good, that's my only choice.
You can find good deals on the MLS. You can find them on Craigslist. You can find them on lists from wholesalers. But you can also find bad deals on all of those places. It just depends. @Candace Postell suggested driving around because that is a good way to find deals that nobody else has seen or knows about. And those can be the very best deals.
Hello @Patrick Philip first id advise you to start with a flip that isn't so "intense" i guess you could say. This is one for someone a little more experienced. The price is wayyy tok high for the amount of work that it needs. You'd probably be lucky to break even after all of the repairs. But, to answer your question. Its a total gut job. You dont know whats behind those hideous walls, new kitchen, baths, flooring throughout, trim, light fixtures, doors, electrical, plumbing, siding/paint, furnace, water heater, landscaping, plus holding costs, interest, insurance and the list goes on. I think you'll be in for more than 25k. These are just some things that i see from the pics (not including the dreadful "unforseen"). You'd need to get an inspection. But all in all I dont think its worth it
Good luck
Where do you suggest finding light rehabs? Craigslist seems to be my best bet at this point.
Craigslist is probably NOT your best source as you'll probably keep coming across deals similar to the one you listed above. Driving around to find absentees is a good start. Maybe finding a whosaler that sales good properties. There is so much competition out there, that the good ones aren't just going to be sitting around waiting to be chosen. Their kind of a hot commodity. Anything worth having is gonna be work, but with persistence and dedication, you'll definitely get there. It'll come a little easier for you to find these deals once you get a routine. Pretty soon folks will be calling you with so many, that you won't be able to keep up! Dont give up
Good Luck
I'm not going to drive looking. That's the wholesalers job. I just presented houses that I found from wholesalers and everyone is telling me they are bad deals.
Find multiple wholesalers and negotiate prices with them. Their job is to make money off of selling contracts, so their probably going to try to over charge/ underestimate repairs. Unfortunately, for some the newbies are their main targets because they know that they are inexperienced and can make a quick sale and better profit this way. Seek out the help of someone experienced to analyze these deals with u. Maybe offer them a small fee for their time and expertise. This is not an easy task, so try to limit your risks as much as possible. Do your due diligence and sometimes this may come with a small fee, but its a small price to pay when it saves you from losing $$$thousands on your first deal.
GL
You can find good deals on the MLS. You can find them on Craigslist. You can find them on lists from wholesalers. But you can also find bad deals on all of those places. It just depends. @Candace Postell suggested driving around because that is a good way to find deals that nobody else has seen or knows about. And those can be the very best deals.
https://orlando.craigslist.org/reo/6034734650.html
This one looks promising. It hasn't even been shown yet. I wonder how I can coordinate all this with an inspector because I would definitely need that. I might not be prepared to "pull the trigger," fast enough. And how could I possibly know if the plywood underneath the shingles is rotten just by observing it myself? But I also have a network of cheap handymen who do labor for cheaper than contractors and do quality work.
How many square feet is your roof? How do you know? Does that include the price of the replacement shingles? If so, what kind? Do you pick them out and buy them, or does the contractor? How do you keep the contractor from charging you for 30 year shingles but only installing 15 year? Do you remove the old ones? Do you get a dumpster? How, and how much does it cost? What if there are already 3 layers old old ones? How do you know and what do you do if the boards the shingles are nailed into are rotten? And most important of all, how do you figure out what all of this will cost? @J Scott pointed you to a great reference book. Part of what it will do is help you by giving you a structure for estimating costs. But like he said, its hard. Its also complicated. Good luck.
I've read the book on estimating rehab cost. I read the book today about flipping. The only thing left for me to do is learn by doing. I see all types of "fixers" and "handyman specials" listed on Craigslist. If those deals from the wholesalers website were no good, that's my only choice.
Given what you've previously learned, and what has been suggested to you on this thread, you should now be able to advise us: what would/should your MAO be for the 15 Acres one? Cheers...
How many square feet is your roof? How do you know? Does that include the price of the replacement shingles? If so, what kind? Do you pick them out and buy them, or does the contractor? How do you keep the contractor from charging you for 30 year shingles but only installing 15 year? Do you remove the old ones? Do you get a dumpster? How, and how much does it cost? What if there are already 3 layers old old ones? How do you know and what do you do if the boards the shingles are nailed into are rotten? And most important of all, how do you figure out what all of this will cost? @J Scott pointed you to a great reference book. Part of what it will do is help you by giving you a structure for estimating costs. But like he said, its hard. Its also complicated. Good luck.
I've read the book on estimating rehab cost. I read the book today about flipping. The only thing left for me to do is learn by doing. I see all types of "fixers" and "handyman specials" listed on Craigslist. If those deals from the wholesalers website were no good, that's my only choice.
Given what you've previously learned, and what has been suggested to you on this thread, you should now be able to advise us: what would/should your MAO be for this 15 Acres? Cheers...
Hard to say because I haven't actually seen the house.
You will be 105/110K in a house that is questionably worth 125k. Run, not worth your time or effort.
That said, you could walk away with 3 to 8k of all goes well. Seems like a lot of work for not enough return.
So where do I find better deals?
https://orlando.craigslist.org/reo/6034734650.html
This one?
@Patrick Philip, for your ANALYSIS, I suggest that it should NOT be "hard to say"! You should already have learned how to discover recent sold comps in the area (in this case I suggest going by sold prices for similar sized ACRES of land-only), and be able to assign a ROUGHLY accurate guess for the rehab and holding costs, and working backwards, deduct the profit that you want to make out of it, to arrive at your Maximum Allowable Offer. But, no harm in viewing it too, right?...
You will be 105/110K in a house that is questionably worth 125k. Run, not worth your time or effort.
That said, you could walk away with 3 to 8k of all goes well. Seems like a lot of work for not enough return.
So where do I find better deals?
https://orlando.craigslist.org/reo/6034734650.html
This one?
On the surface, I would say: yes, that one. I like the "historic home" teaser, but, no pics?...
@Patrick Philip, for your ANALYSIS, I suggest that it should NOT be "hard to say"! You should already have learned how to discover recent sold comps in the area (in this case I suggest going by sold prices for similar sized ACRES of land-only), and be able to assign a ROUGHLY accurate guess for the rehab and holding costs, and working backwards, deduct the profit that you want to make out of it, to arrive at your Maximum Allowable Offer. But, no harm in viewing it too, right?...
It's not 15 acres, it's 0.15 acres. I know how to run comps. I don't know how to assess repair value without viewing the house (and even that might not help with this one). All I can do is go by the wholesalers numbers.
I wouldn't know what to do with the walls, floors, and cabinets. Should I put ceramic tile throughout? What do they call those interior walls that look like thin wood? Are those cabinets too old? All it would take is for someone to tell me once.
@Patrick Philip, 0.15 only? Oops! I'm sticking to my comment about Offering less than land value!
Oh, and NEVER "go by the wholesalers numbers", without doing your own research - every time!...
You say you've read the books, but your comments and questions would indicate otherwise. You say you won't drive for deals because that's the wholesalers' job. You say you know more than we think, but you aren't sure what questions to ask. You say you've been studying for years, but you don't know where to start.
Do you have your financing in order? Have you looked at 100 houses in person? Have you practiced creating SOWs and estimating rehab costs? Have you gotten a purchase contract written up by a knowledgeable attorney?
It sounds to me like you're looking for the easy way, as opposed to being willing to put in the work to really learn, from the ground up.
We can't help with that.
You say you've read the books, but your comments and questions would indicate otherwise. You say you won't drive for deals because that's the wholesalers' job. You say you know more than we think, but you aren't sure what questions to ask. You say you've been studying for years, but you don't know where to start.
Do you have your financing in order? Have you looked at 100 houses in person? Have you practiced creating SOWs and estimating rehab costs? Have you gotten a purchase contract written up by a knowledgeable attorney?
It sounds to me like you're looking for the easy way, as opposed to being willing to put in the work to really learn, from the ground up.
We can't help with that.
My major sticking points right now are:
1. Knowing what needs to be done to a house when I see it. Some stuff is obvious, but not everything. For example, I would want to put ceramic tile throughout all my rehabs because that's what I like.
2. Estimating rehab cost. I know I can't just use the wholesalers numbers. This would only take a few practice runs to perfect.
And, no, I'm not going to drive for dollars because I have better uses of my time. I have bird dogs that work for me on my wholesaling campaigns.
My major sticking points right now are:
1. Knowing what needs to be done to a house when I see it. Some stuff is obvious, but not everything. For example, I would want to put ceramic tile throughout all my rehabs because that's what I like.
If you're going to make rehab decisions based on "what you like," then you shouldn't be in this business. Clearly, you haven't read the BP book, and you haven't learned the basics of how to profitably flip houses.
If you think it would just take a "few practice runs" to "perfect" estimating, again, you have no idea what you're talking about.
Why are you asking about how to find deals when you already seem to know how to do it?
Asking others if a house is a good deal is a dangerous way to go about it.
How I go about a house I like.
I see the listing (usually with photos). I use the asking price to start, and immediately get a good handle on ARV. These two numbers are probably the easiest to come up with (well, one is given to you, the other is based on local sales).
Then I take old budget sheets (some from past flips now, at the beginning, I created full blown spreadsheets with every screw, nail and board and have budget prices). I decide what I "think" the house needs, and then fluff it with contingencies.
I then calculate holding costs, buying costs, selling costs. I plug it all into a spreadsheet and it gives me a "profit" number. With this number (before I ever see the house) I decide if it's worth it. If the profit number says $10,000, but it's only a $100,000 house, I'll go look. If it says $10,000 and it's a $300,000 house, I will probably pass.
I schedule a walk through, I take lots of notes (photos of things I want to remember or re look at) and then head back and revise my numbers.
With my new more solid repair estimate I can work backwards. Now I take the ARV, holding costs, rehab costs and then subtract that all with the profit I want to make, and I get my offer price. Sometimes I will offer less than this, if the house is hot, I will go right in at that price.
This is MY way. Everyone does it different. I have found deals on Zillow (house never showed up anywhere else), MLS and through word of mouth. I have NEVER done a deal where someone else told me the rehab costs, especially when that person is the one sellong the house.
At this stage of you feel you are ready, it is pointless asking about each deal on here. Go buy one and get your hands dirty. Come back and tell us how it went!!
Asking others if a house is a good deal is a dangerous way to go about it.
How I go about a house I like.
I see the listing (usually with photos). I use the asking price to start, and immediately get a good handle on ARV. These two numbers are probably the easiest to come up with (well, one is given to you, the other is based on local sales).
Then I take old budget sheets (some from past flips now, at the beginning, I created full blown spreadsheets with every screw, nail and board and have budget prices). I decide what I "think" the house needs, and then fluff it with contingencies.
I then calculate holding costs, buying costs, selling costs. I plug it all into a spreadsheet and it gives me a "profit" number. With this number (before I ever see the house) I decide if it's worth it. If the profit number says $10,000, but it's only a $100,000 house, I'll go look. If it says $10,000 and it's a $300,000 house, I will probably pass.
I schedule a walk through, I take lots of notes (photos of things I want to remember or re look at) and then head back and revise my numbers.
With my new more solid repair estimate I can work backwards. Now I take the ARV, holding costs, rehab costs and then subtract that all with the profit I want to make, and I get my offer price. Sometimes I will offer less than this, if the house is hot, I will go right in at that price.
This is MY way. Everyone does it different. I have found deals on Zillow (house never showed up anywhere else), MLS and through word of mouth. I have NEVER done a deal where someone else told me the rehab costs, especially when that person is the one sellong the house.
At this stage of you feel you are ready, it is pointless asking about each deal on here. Go buy one and get your hands dirty. Come back and tell us how it went!!
I'm not ready just yet. I need to go view some houses first then run numbers.
Your method sounds like a good plan.
Spend some time getting to know what things cost.
Example: Price out Sheetrock, screws, tape, compound, etc. and that will let you know what that material costs. A down and dirty way to "estimate" is to double all materials and that can get you close to labor costs. Some trades this isn't true, but again, this is all a "start". guesstimate bedroom sizes and determine floor coverings needed. HD had a calculator for carpet pricing that I have used in the past.
Get a rough idea of what light fixtures, faucets, vanities cost and plug these numbers in. At the start you should be doing a lot of research on what things cost. No one can tell you, you need to educate yourself the best you can. It's better to be confident in your pricing/budget, then trusting someone else's numbers (unless it is your contractor).
@Patrick Philip You ask where you find better deals and give a Craigslist example. I know that area and there are some deals up there. However, to answer the question... Finding you own deals or teaming up with folks that will bring you a deal is the best. For instance, every wholesaler has a list of buyers that they hit as soon as they have a deal to sell. If it is a GOOD deal it is gone in one or two phone calls. If it is a questionable deal, it hits Craigslist and every other list out there that is available for the wholesaler.
Just a thought, but how many people have looked at a deal that is on these types of lists? How many good deals do you think are out there sitting on Craigslist. I would network, network, network and then network some more. Find the people that specialize in finding the deals organically and get them to call you FIRST. I have found many deals by being that first call. Once you are established the sellers know where the buyers are, be that guy.
I am not saying you can never find a CL, MLS, or List deal. You are simply in the shark tank at that point, blood is in the water. Be the only shark looking at a deal and you have a much better chance of making real money. If you spend your time making 5K on a deal you will simply run out of time. Time is truly your most precious commodity, spend it wisely and hit the home run when the time comes. Good luck in your search! Wishing you the best.