Identifying a Flip (what to look for)

7 posts by 5 users

Medium 1428536224 avatar rei artist Alexander Budka
Commercial Real Estate Agent from San Mateo, CA
13 Posts
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Alexander Budka

Commercial Real Estate Agent from San Mateo, California

Nov 13 '12, 01:58 PM


Hey All,

Im looking to flip my first property in what I see as a niche market. My first question is: how do you know what holds value? Secondly, how do you estimate repairs precisely?

Alex



Medium 1399358899 avatar xrustyx Steve M.
Involved In Real Estate from Goodlettsville, TN
291 Posts
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Steve M.

Involved In Real Estate from Goodlettsville, Tennessee

Nov 13 '12, 03:03 PM
1 vote


How do you know what holds value?

I'm not entirely sure what you mean with the question?

Secondly, how do you estimate repairs precisely?

For me, I had to jump in with both feet before I fully knew/understood the cost. You could try having a GC come out and bid on what needs to be done prior to a contract on the house. Or if you wanted to act as the GC, bring in Subs to bid it out prior to contract.

I *thought* I knew what certain things would cost ... But as you can imagine, I lowballed most items on the checklist on the first flip. I now can fully grasp everything and I have bids from several different contracts (from electricians, to plumbers) for certain things.



Medium 1399656989 avatar david n David Niles
Buffalo, NY
615 Posts
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David Niles

from Buffalo, New York

Nov 13 '12, 03:23 PM


Hey Alex welcome aboard bud.

As far as value, bottom line is, you need to know your market, that should tell you a lot of the story.

Estimating repairs is an art that if you are not and have not been in the construction fields will take time to learn, get some contractor quotes, ask questions and then take some walks around your big box home repair stores looking over materials and prices for what your current projects are.
There is no exact calculator for what each repair should cost, areas differ and quality of repair changes pricing too.

Rehabbers know, you make your money when you buy, not sell.

Good luck.



Medium 1399649407 avatar cirrusav8or Brian Burke
Real Estate Investor / Syndicator from Santa Rosa, CA
1190 Posts
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Brian Burke Verified

Real Estate Investor / Syndicator from Santa Rosa, California

Nov 13 '12, 08:25 PM
4 votes


This might sound totally ridiculous, but take your best estimate after doing your research, and double it. If you get a contractors estimate, multiply it by 1.5. Until you have done a few of these you will grossly underestimate the costs. After the final tally, you'll ask yourself, "where did all of that money go?" One of the most common reasons that most people never do a second flip is that they totally underestimated the costs on the first one.



Medium praxis capital logo cmyk stacked 900pxBrian Burke, Praxis Capital, Inc.
E-Mail: [email protected]
Website: http://www.PraxCap.com


Alexander Budka

Commercial Real Estate Agent from San Mateo, California

Nov 20 '12, 03:42 PM


Thanks everyone for your input. It looks like I have to get a hold of a few contractors now. I found a great deal and it lead to another great deal. Would you recommend wholesaling one?



Brian Burke Verified

Real Estate Investor / Syndicator from Santa Rosa, California

Nov 20 '12, 10:08 PM


If you don't have the resources to buy both, yes. If this is your first flip, don't attempt to do two at once. Complete one before trying a second one. Plus, by wholesaling one of them, you will get feedback during that process that will give you some insight on how other investors underwrite their deals. That can be a valuable learning tool.



Medium praxis capital logo cmyk stacked 900pxBrian Burke, Praxis Capital, Inc.
E-Mail: [email protected]
Website: http://www.PraxCap.com


Medium 1448386327 avatar financexaminer Bill Gulley
Investor, Entrepreneur, Educator from Springfield, MO
20670 Posts
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Bill Gulley

Investor, Entrepreneur, Educator from Springfield, Missouri

Nov 21 '12, 08:56 AM


As to holding value, look to the first rule of real estate;

Location, location, location!

BTW, you never know if it's a deal until you sell it if you're flipping. :)



Medium logoscopiccroppedblue2Bill Gulley, General Real Estate Academy
Website: https://generalrealestateacademy.com


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