All Forum Posts by: Andy Sabisch

Never give 50% down even if they need materials.  If the contractor can't get materials and work to a schedule you probably need a new contractor.  As Peter said, start with a minimal deposit to lock the work in and have a well defined milestone draw schedule that you both agree to.

Learned that the hard way - once many have your money they become harder to reach and work to your schedule.

You need to determine what the repair costs will be and what the ARV will be (not what the seller tells you it is). If the ARV less the repairs (plus at least 10% for contingencies) less your desired profit less the closing / sales costs are more than where you can meet, simply walk away. Investing has to be a numbers game and emotion has to stay out of it. We have seen cute houses that would have worked for us to flip but the seller wanted prime money and we walked.

Looking at the photos, you have some major repairs.  Depending on the ft2 of the house, the need for permits and unknown expenses, you need to be in the range you are at . . . over $100K and you will likely be underwater.

Always interested in tools to better track / manage jobs . . . . appreciate the offer, would appreciate a copy

Depends on the area of the country (but then again more storage space is always welcome) and as others have said, if it is allowed by code.  Hate to do it and then be forced to tear it down.  Also, look at the appearance of the finished product.  The house in the lower left photo is one that closing it in would likely hurt more than it helps.  Also, there is more to the work than putting up walls.  You might have a contractor check it out before you pull the trigger - structural requirements, moisture, drainage, etc.

Over the years we have found that most home inspections are generic in nature using a template to generate the report and insert photos.  The CYA phrase "Recommend contacting a licensed professional to inspect XXX" shows that most are generalists and not people that find issues that really matter.  A torn window screen, crack in the wall, etc., tell me nothing I could not see myself.  But the big $$ items I have professionals I call to look at specific areas - roof, HVAC, plumbing, foundation, etc. - who I then use to do the work if we buy the property.  They often do not charge me since they know I will use them after closing.  The minor stuff does not bother me but a $10K furnace or a $20K roof sure does.  When we sell, we dread the scary reports that first time buyers freak out over which contain nothing of substance.  And there is really no protection in case they missed anything which is another reason we steer clear of them.

Mold remediation costs can run the spectrum - get multiple quotes.

Encapsulating the crawlspace is something you can do yourself as long as it is not a really low area.  We have down them in a day but on other properties, had to hire someone as laying in an 18" high space is not high on my fun list.

You mentioned the LVP is coming up . . . that sounds like something else is going on there and you should have a contractor check it out to see if they can diagnose the problem.

Good luck in this but I would not look at legal action . . . doubtful you will get out what you would need to invest

Contracts need to have EMD to be binding . . . and make sure you NEVER pay the EMD to the seller. Either give it to the seller's agent or the closing attorney / title company.

We avoid them as they do not hold value (in our market) and are harder to finance for buyers.

 Jim, Great points.  To be honest our screening has avoided all but one tenant (plus this one) being a problem.  In fact this one moved out under the cover of darkness and while there was some stuff left and damage to address, they are out and we are only short one month rent before we find another tenant.  It is surprising that even when you have a tenant making good money that some feel that rent is the last thing to pay . . . 

Super informative post - shows that there is more to a flip than what many claim (gurus).  Despite having done a number of flips ourselves, I picked up several tips and points to consider from your post.

Congratulations on getting it behind you!