1. Have financing in place
2. Create relationships with agents/brokers who can give u lists and deals (forecloses, behind on mortgages, etc) (eviction records online)
3. Create Craigslist ads
4. Have signs in areas
5. Go to FSBO websites and MLS sheets
6. Find leads, analyze the profits, and give offers from most profit to least (potential)
7. Buy property
8. Find recommended contractor in area
9. Sell house
I would find the contractors before buying otherwise o wouldn’t know how much it will cost to rehab
i would also have an idea how much it costs for typical things so I could put in offer faster
Such as cost to replace toilets
Cost per square foot for LVP and install
Cost for shower curtains and rod
Cost for painting cabinets
Cost for new kitchen faucet and installation
Cost for new fixtures in tub and sink in bathroom
Cost for resurfacing 10’ countertop
Cost to paint inside 1300 square foot house with light grey walls and white trim
Cost for new handles on 6 interior doors
Cost for new handle on 2 exterior doors
Cost of 6 new ceiling lights and installation
Cost for 2 new exterior lights including installation
Cost of new A/C system for 1200 square foot house
Cost to have lawn maintained for 3 months while rehab is taking place
I appreciate it, thank you!
@Aidan King , I agree with Todd, contractors are really your execution. Being able to close on a deal is meaningless if you can't execute. But also, the same work can yield a vastly different cost between two contractors.
But in reality it is all a chicken and egg game: having financing and contractors lined up are useless with no deal, having a deal and contractors is useless without financing, and have financing and deal are useless without contractors.
The biggest factor I will say is make sure you have a lot of margin built in. I have amended my criteria to come to: I will only strongly consider deals with $50k+ profit potential. Anything less simply becomes not worth my time. But also, it is somewhat challenging to blow through a $50k profit, after buffering in contingencies on the rehab. But it is easy to have $30k in overages. So in that scenario, I can still make $20k.
Your 1-9 list is missing many items before you even get to line 1.
Step 1 is getting to know your local market conditions, which streets/neighborhoods are good and bad, which have the lowest crime, best schools, best walking scores, most jobs, population growth, etc. Knowing inventory levels of now and past is also crucial to identifying where your market is headed.
Step 2 is learning how to properly and accurately estimate rehab costs - this takes time, a spreadsheet and lots of practice. Look through some of my previous posts on estimating rehab costs, I have gone into great detail on how to in the past here on BP.
Step 3 is building your contractor team. You will need to decide if this is going to be a full time business (if so, then acting as your own GC and getting subs for each trade is crucial). Once you have your team, you then can move to the money phase.
Step 4 is your step 1-6.