All Forum Posts by: Marcus Auerbach

@Michael Madden were you able to close the deal?

@Christopher Patterson congratulations and welcome on board! I have heard good things about the Madison REIA and definitley a place to be for you. REIAs are great, not only you can meet a lot of like minded people and get a wealth of ideas, I always found the meetings very insprining. Just be mindful, there are also a lot of people with their own agenda. If you have a deal under contract definitley post the details here on BP and have it hacked apart - best protection against a lemon deal.

@Philip Velleux I will recommend three things (on top of Brandon's new books)

1.) Download The Wisconsin Way - State Landlording Guide (free) 

2.) Order a complete package from Wisconsin Legal Blank (all contracts and forms you need)

3.) Landlording on Autopilot by Mike Butler is a great nuts & bolts read.

@Account Closed actually, yes there is a work arround to code compliance to buy a distressed property as is: the city will make you sign a form that you will take care of the code violations. In my area they usually give us a year, which is plenty of time, typically we are done in six weeks.

I have changed my opinion about code compliance and inspector in general. When I started out I heard a lot of horror stories about inspections and in particular inspector who make it really hard for investors. I come to find out that I really like working with the inspectors in my area - I want everything code compliant, it's in my best interest. I usually schedule a walk through together before we start to discuss issues and what to best do about it. These guys are a wealth of knowledge and they are happy to share!

The other issue is that most houses that we buy have some sort of DIY plumbing and electrical. The makeshift solutions we find during demo are often entertaining, but sometimes just dangerous in terms of major property damage or bodily injury. These things get usually identified during code compliance and that lets me sleep at night, because I dont want to be on the hook for someone getting electricuted in the shower, because someone thought it was a good idea to put an open junction box under the shower next to the copper pipes....  

Correct. From what I hear there is a debate going on to reinstate the practice in order to maintain overall safety and standards of the housing stock. 

@Account Closed actually, yes there is a work arround to code compliance to buy a distressed property as is: the city will make you sign a form that you will take care of the code violations. In my area they usually give us a year, which is plenty of time, typically we are done in six weeks.

I have changed my opinion about code compliance and inspector in general. When I started out I heard a lot of horror stories about inspections and in particular inspector who make it really hard for investors. I come to find out that I really like working with the inspectors in my area - I want everything code compliant, it's in my best interest. I usually schedule a walk through together before we start to discuss issues and what to best do about it. These guys are a wealth of knowledge and they are happy to share!

The other issue is that most houses that we buy have some sort of DIY plumbing and electrical. The makeshift solutions we find during demo are often entertaining, but sometimes just dangerous in terms of major property damage or bodily injury. These things get usually identified during code compliance and that lets me sleep at night, because I dont want to be on the hook for someone getting electricuted in the shower, because someone thought it was a good idea to put an open junction box under the shower next to the copper pipes....  

@Jimmy Campbell yes, actually I am one of them. It really should say "We buy houses for cash, but we expect some discount in exchange for making it really fast and easy and taking the house as is with the leaky roof and the cracked basement wall no questions asked." I used to buy on distressed REO's MLS, but recently I shifted more focus to direct marketing: we buy houses cash. Did that answer your question?

@Shane Mcc you can certainly get lucky, but most guys will tell you they have to send out a lot of letters to get consistent results. For me its about 3000 letters for 30 warm leads to buy one house.

@Shane Mcc although expect 0.1% to call the cops, the better business buro or some other consumer protection organisation because they feel its a fraud or they feel stalked. Be friendly, remove from mailing list and go on.

@Whitney Rekowski I definitley agree with my fellow colleagues above - contract it out. I think I am in good company when I admit that I was looking for the cheapest contractors when I started out. Today I pay a bit more per hour in average, but my overall project costs have gone a little while (because we are much faster) my finish quality is much better. Also, much less headaches.

Like @Dawn Anastasi said finding good contractors is not easy, especially if you want good, cheap and fast. (By the way you never get all three) The way I look at it you have the fly by night guys on the low end and the subdivision guys on the top end. The first group is from hell and will cause you gery hair while the second group is excellent but will make you broke. What you need is the guys in the middle.

A good place to start is @J Scott's book about estimating rehab cost - he knows investor pricing (vs consumer pricing) and so you know what you should be paying and dont rely on the contractor telling you how much it will be. The funny thing is when you get three bids expect them to be wildly different. J's book gives you a good base line.

Finally dont make large down payments, materials delivered to your job at the most. If you have to make your first payment on the first day of work, when they are actually on your job, but never before. And then pay as the job progresses. The only time I got talked into 50% down (leaving for a business trip out of country and under pressure to hire) was when I got screwed royally.

Bottom line: contract it out and dont go with the cheapest guy either. What you pay is what you get.. Good luck!