buying 4 fixer uppers at once

13 Replies

I'm looking to sell my home soon and pretty sure I'll make close to a 100k profit based off homes that sold in my neighborhood. I see 6 or 7 homes in my city around 45k for sale that I would love to buy to fix and rent. I'll be new to the whole landlord thing but anxious. I know people on this site say buy 1 home to fix and rent to get your feet wet but would I be crazy to buy 4 and spend the next year fixing to rent ?

Also putting 15k to each home to buy and financing the rest if possible would be great so I could use the extra money towards rehab etc. I want to jump right in but wondering if buying 4 would be a bad idea and why? Any obstacles from experience anyone can share please let me know 

Few things come to mind..

  1. How will you get financing for these homes?  
  2. How much are the loan fees for each deal?
  3. Are you confident in your ability to complete the rehab?

Adrian Chu, Adrian Chu & Associates | Horizon Real Estate | [email protected] | 2064075452 | WA Agent # 107768, WA Lender # MLO-920749

I think it doesn't sound like a good idea.

Actually it is just an idea right now.  

Why don't you try to  find the 4 houses first and then think about how each one will work and will cash flow.  You can't find them all at the same time anyway  You actually have to start with the first one anyway

What's wrong with doing one at a time or at least the first one and see how you do with the estimating and the hiring of the contractors and  the Rehabbing and the renting.



@Kellen Bradford

I haven't done one yet myself but when I do, I'm definitely starting with one. From what I've read from other peoples' experiences, things come up out of nowhere. It would be devastating to overextend yourself and have the unexpected occur on FOUR projects, to the extent that you are unable to rent them and now you are stuck with four house payments, insurance, taxes, etc. and I assume you plan on having a primary residence, so five payments. Also, you probably would have financed a lot of the repairs, so you'll be paying project loans as well. $100k won't last long in this scenario. 

Have you considered starting with a quad-plex, renting out three units and living in one? You would essentially be living for free since cash flow from the other three units should cover your payments. Then, when you are ready, move out (perhaps into another multifamily) and rent that last unit. If you are eager to get a bunch of rentals under your belt right away, this sounds to me like your best bet.

Whatever you do, keep us all posted. Good luck!

@Kellen Bradford I agree with @Adrian Chu :

First it is not CARZY to think like this, we all have.  I say you are ambitious not crazy and thats a good thing. :-)

Are you sure that 15K will cover the rehab on each property?  I know it sounds good, but speaking from experience we have all been down the road of 15K budget that turns into 20-25K easy on a project.  You don't want to have one property sink you because of unforeseen issues and you don't want to rob peter to pay paul on any project.  Also if you are going to live in your fixer upper and rehab multiple houses it will be a daunting task and you could burn out quick.  My suggestion is grab one and detail every aspect of the process (budget, repairs, problems etc).  This way you can see what you thought it was going to be like and what it actually was like.  Just my two cents!

Best of luck!

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I hope you have enough experience in rehabbing and land lording because these are two separate niches and require different skill sets. I tried rehabbing multiple properties and got in to a lot of trouble. I guess everyone here is agreeing that it would be better if you start with one property while gaining experience of local market and building a team.

Good luck.

I do feel like it's a lot of work. And I am a Lowe's employee and get great deals on home improvement items. Just did 1000sqft of wood flooring in my home for under $200. so hoping me working there cuts chunks out rehab fees. Me and 2 family members of mine would do the work.    

I will most likely start off with 1 or 2 at most than stay in 1 home while working on both. Than as soon as both are rented out I will move on to 3rd. My question would be what loans could I  pursue if home loans are less than 40k? I'm really trying to learn and explore my options as I won't be putting my home up for sale for another 6 months and could easily take another 3 or more to sell. So I have time to devise a plan.

Originally posted by @Kellen Bradford :

I do feel like it's a lot of work. And I am a Lowe's employee and get great deals on home improvement items. Just did 1000sqft of wood flooring in my home for under $200. so hoping me working there cuts chunks out rehab fees. Me and 2 family members of mine would do the work.    

I will most likely start off with 1 or 2 at most than stay in 1 home while working on both. Than as soon as both are rented out I will move on to 3rd. My question would be what loans could I  pursue if home loans are less than 40k? I'm really trying to learn and explore my options as I won't be putting my home up for sale for another 6 months and could easily take another 3 or more to sell. So I have time to devise a plan.

 Depends on the market. If those units in that price are around next year, then no. If the market is going up, which it is, and you can afford it, yes. But don't over pay.

I'm not sure how many empty units we have waiting to be refurbed, maybe 4 at the moment, but do you think I'm going to pass up ridiculous underpriced houses because I'm not ready to renovate, heck no.

One house that keeps getting pushed back down the list, bought for $20k two years ago, rents with a caretaker tenant for $300, that covers costs, and it's appreciated in its current state to probably around $35k already. It has maybe $15k of work required, and the neighborhood is now approaching the $80s again. Why would I not buy it. Finished, rent will be approaching the $800-900pm mark.

Admittedly one house we bought for $15k was done for sport. Someone pissed the wife off badly so she wrote a $15k check that afternoon to spite them. But again, it's worth more than she paid, and when it's finished its up around $50k, not the greatest neighborhood, not the worst either, but at worst, it goes on s.8.

Definitely, love the ambition just make sure you take calculate risk... Get it done !!!

Props on thinking big from the beginning! But take a step back and take a look at how you will actually accomplish the task.

You would typically be better off financing and renovating 1 house at a time to minimize holding costs (financing, taxes, etc). If you were even able to finance 4 at a time, that means you are putting in 1/4 the amount of energy to each flip, and theoretically will take 4 times longer (and pay 4 times as much in holding costs).

Why not flip one at first, then rent it out or sell it, and take those profits and roll them into your next, creating a bigger portfolio with each completed/successful flip?

Originally posted by @James DeRoest :
Originally posted by @Kellen Bradford:

I do feel like it's a lot of work. And I am a Lowe's employee and get great deals on home improvement items. Just did 1000sqft of wood flooring in my home for under $200. so hoping me working there cuts chunks out rehab fees. Me and 2 family members of mine would do the work.    

I will most likely start off with 1 or 2 at most than stay in 1 home while working on both. Than as soon as both are rented out I will move on to 3rd. My question would be what loans could I  pursue if home loans are less than 40k? I'm really trying to learn and explore my options as I won't be putting my home up for sale for another 6 months and could easily take another 3 or more to sell. So I have time to devise a plan.

 Depends on the market. If those units in that price are around next year, then no. If the market is going up, which it is, and you can afford it, yes. But don't over pay.

I'm not sure how many empty units we have waiting to be refurbed, maybe 4 at the moment, but do you think I'm going to pass up ridiculous underpriced houses because I'm not ready to renovate, heck no.

One house that keeps getting pushed back down the list, bought for $20k two years ago, rents with a caretaker tenant for $300, that covers costs, and it's appreciated in its current state to probably around $35k already. It has maybe $15k of work required, and the neighborhood is now approaching the $80s again. Why would I not buy it. Finished, rent will be approaching the $800-900pm mark.

Admittedly one house we bought for $15k was done for sport. Someone pissed the wife off badly so she wrote a $15k check that afternoon to spite them. But again, it's worth more than she paid, and when it's finished its up around $50k, not the greatest neighborhood, not the worst either, but at worst, it goes on s.8.

 That's exactly how I feel! I see at least 2 homes right now I can get for 30k and homes in that neighborhood are selling for 80k. Not that I want to sell because having a passive income is the DREAM ... I could always buy than use equity to rehab if that's possible. I know that I can't wait 

10 years from now you will have 4 buildings empty although one you will be half started on one. Buy one good home and rent it that way for 10 years you will have some income and realized some value. 

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