Real Estate Broker · Marysville, WA · Member since 2013 · 28 posts · 8 votes
Hello BP,
I purchased a house to initially flip and my contractor in the middle of the flip kept asking for more money and more money. Eventually, I had to fire him unfortunately the cost has already surpassed my initial cost plan. I don't know anymore contractors and the ones I have called basically told me 20K to finish the rehab. I am running out of luck finding a decent contractor. I don't have 20K more to spend on this house for a flip and it is not rent ready. Still needs work. I don't want to dump more money into it because it puts me over my initial budget. I tried to sell it with no luck. To break even is worth more than what the house is at the moment unless the market miraculously sky rockets. Looking for advice? The property is in Columbus,OH.
Investor · Cincinnati, OH · Member since 2015 · 242 posts · 182 votes
8y
Your initial budget is out the window. If running over $20K puts you under water you didn’t have much margin built in even if things went well. After this one you’ll know not to work the numbers this way again. Determine which gets you out of it best - sell now as is or finish rehab and sell. Sounds like you’ll take a loss. Cut your losses and get out. Chalk it up to experience. Lessons aren’t cheap.
Harper Woods, MI · Member since 2017 · 384 posts · 311 votes
8y
What is left to complete? My first few flips and rentals I preformed most of the work. Kitchen, bathroom and installing laminate etc. If its things of that nature watch a few tutorials and get at your self you will save thousands of dollars, get some hands on experience and a better outlook for the next property. IF you arent the DIYer think about getting a Private Money Lender to complete the work.
Investor · Cincinnati, OH · Member since 2015 · 242 posts · 182 votes
8y
Your initial budget is out the window. If running over $20K puts you under water you didn’t have much margin built in even if things went well. After this one you’ll know not to work the numbers this way again. Determine which gets you out of it best - sell now as is or finish rehab and sell. Sounds like you’ll take a loss. Cut your losses and get out. Chalk it up to experience. Lessons aren’t cheap.
Real Estate Broker · Marysville, WA · Member since 2013 · 28 posts · 8 votes
8y
I would love to finish the rehab myself, however, I live out of state. So that is not an option. I didn't expect my contractor to all of a sudden steal my money and then some. The funny thing is he has done work for me before with no issues.
Real Estate Broker · Marysville, WA · Member since 2013 · 28 posts · 8 votes
8y
no I do not. We have done work together in the past. Didnt need one before but now I realize too late doesnt matter. I should always have one regardless. Never know about people.
Investor · Independence, MO · Member since 2016 · 89 posts · 70 votes
8y
Several lessons here then unfortunately. Always always have a detailed contract covering everything and make sure to have that margin to avoid issues like this. It’s an expensive lesson but if you learn it and move on then you can avoid a repeat. I’d try and sell it off market as fast as possible to limit the loss
William, send me a PM - I have a close friend in Columbus who is a Licensed RE and has contractors - maybe they can assist
Sounds like you may need to bite the bullet on this one, finish the reno, maybe rent it for a year, make some of your money back and then sell it - ???
Could you do a construction loan? It would have less fees than credit card/hard money loans. There are a few local banks that may be able to help. Depending on how the appraisal comes back you may be able to get it finished and either sell for what you have in it, or rent it.
Real Estate Broker · Marysville, WA · Member since 2013 · 28 posts · 8 votes
8y
Hello Adam,
Never thought about a construction loan. I will look into the requiements for that. Thanks. I see your in Mechanicsburg, OH. I use to live in Marysville. I golfed at Indian Springs golf course.