All Forum Posts by: Andy Sabisch

Wholesaling has become a negative term with sellers anymore . . . with the people that care getting into it and not understanding how all the parts need to interact, it sticks the seller with a property that is locked up while the wholesaler hops to find someone to buy it. Either they have no buyer list and start fishing or they over-inflate the ARV while under-estimating the reno cost and can't find a buyer for the contract, more and more sellers are putting the non-assignable clause or at least not assumable without seller approval. The last few properties we sold had non-assumable clauses added and the EMD was more than $100 to show they were serious buyers.

As others have said, you can put anything in a contract that both sides agree to but the assumable clause is becoming a harder sell due to the downside the seller has.

Based on the size of your house, a re-roof will be your best option.  As has been stated, not sure how many layers you have and what the condition of the sheathing might be.  Get a quality roofer and you will be set for decades.

I know that often inspectors work with agents and that is another reason I tend to avoid home inspectors.  If you are bored sometime look into what is needed to be an inspector in your state . . many have minimal requirements and the companies that offer training sell software that prompts them to look at specific things, snap photos and generate a report in an hour or less . . . . often finding fault with items that are of no value and miss the big issues that will cost you.  That disclaimer in the report speaks volumes.  Had you had a roofer look at the house, I think you would have gotten a different picture to discuss with the seller.

Speak to investors in your area and see if they have a roofer that they recommend.  In our area, we have a list of trades that we know we can count on and since we do business with them on a regular basis, they bump us up on the list to get work done.  

Good luck and consider how you inspect homes in the future . . . .

As Scott said, a new roof while not in your budget, will save you problems down the road that patching what you have will cause.  Leaks can manifest themselves into ceiling damage, wall damage and mold which can have health implications. 

As far as your inspector not catching the problem, you will find that all of them have disclaimers saying that they are not responsible for items that they missed . . . which I always feel is a weasel clause and why we do not use them for purchases.  I know what the big hitters are - roofs, foundations, electrical, plumbing and HVAC.  If any of them are suspect, I call a professional instead of having a home inspector miss the issue or tell me to call a professional which I could have done up front.  You could have gotten a roofer to give you an estimate for repairs at no charge within the inspection window . . . and then you would have had something you could have gone back to the seller and renegotiate the purchase price but that is water under the bridge at this point.  Do not expect the inspector to do anything other than say sorry, I missed it.  Did the inspector go up on the roof?  If so, not sure how he did not call out the condition in the report.

As far as the photos, the spots on the rafters are not mold so no worry there.

When you look for a roofer, unless you know someone in the business, get more than one estimate as you will find prices vary and what it includes also varies.  What will they charge per sheet of plywood that needs to be replaced, what about rafters?  What warranty is provided and what does it cover?  Make sure you are comparing apples to apples . . . .

Good luck!

Can you add some details such as price range, type of property (SFR, MFU, etc.), how distressed (cosmetic or total rehab)?  This information may help you get the specific leads you and your investor is looking for.

I would have to add one more post to this thread.  If you are looking at finding off market properties to flip, here is a suggestion.  With all the people that are getting pulled into the promised payoffs wholesaling properties (which has given wholesalers a less than positive name and in some areas, driving regulations to be enacted), try reaching out to as many as you can find in your area and let them know what you are looking for.  Let them spend the money for the lists and direct marketing.  Let them find properties that might work for you as flips.  Your challenge will be separating those that can't determine a true ARV and reno cost from those that can.  When you find some that can, use them to bird dog properties and you can pick and choose the ones you want to flip.  

You can find them from bandit signs plastered on telephone poles, posts on Facebook and even at your local REIG meetings . . . . let them know your criteria and see what they bring you . . . times are changing as are the tools to find properties and what worked a few years ago before the flood of those that see $$$$ with minimal effort came onto the scene, lists worked . . . VAs and virtual wholesaling have inundated sellers that might otherwise have been willing to talk turkey.

Here is the thing with lists that are purchased . . . singly or combined.  Thanks to the myriad of gurus hawking get rich quick with no experience or money on Facebook, the list you are buying and marketing to has already been bought by 100 to 500 to 1000+ people before you.  Can you stumble on a lead that opted to pick your mailing or call over the rest?  Sure but you can be 100% certain that with the lists being sold by every guru out there and the use of AI and VAs, you are now in the middle of a crowd.  We are contacted several times a week by people that pulled up a list of properties not owned by the person living there, no loan, etc. asking if we are interested in selling.  We usually say no and hangup but occasionally we talk to them and hear the same story . . . bought a list, cold calling, no success yet . . . . think through your plans as the marketing techniques have changed in the past few years with the masses trying to get into the real estate investing market with no experience and no money based on the claims that it is easy.  Lists work but you need something other than a list to stand out from the others using the very same list you just bought.

You will hear some with a different perspective and I would welcome hearing how they found the lists to pay off . . . not trying to be a downer - just passing on what we have seen recently and what has changed over the past few years.

You have a leg up on many new investors in that you have an understanding of the reno end of the business and hopefully in conjunction with your father, you have contacts in the trades for work as needed on your projects.

There are always deals to be had for those that can think outside of the box and see what others overlook.  Don't get sucked into the programs that promise to show you how to find those mystical deals  for a fee.  Try reaching out to wholesalers in your area . . . you can find them online, calling some of the bandit signs you see all over or through a local REIG.  Let them know what you are looking for and in what area . . . then validate their numbers (ARV and reno costs) to see if the deal is real or in their mind.

Always budget for the unexpected . . . . you and your father probably know that any project costs more and takes longer than initially projected so make sure you factor carrying costs into the numbers you run.  The calculators on BP are a great tool so be sure to use them.

Look for the RIGHT deal and then put your knowledge to use to drive it to the finish line . . . . best of luck!

As they say, without curb appeal, you often do not get buyers in the front door to see what you have inside.  What we have done over the years include:

1) Trim / remove trees, shrubs, etc.  Bushes that looked fine 50 years ago are often past the point of saving and removing them, putting in a mulch bed and planting some new ones is an easy fix to an eyesore.

2) Repainting the exterior.  This is an obvious one but do your homework and get several estimates as the cost varies widely.  We could post some before and after photos that show the stark difference.

3) Consider painting the front door with a color that you might never have gone with.  One of of recent homes my wife went with a deep blue and I cringed . .  but buyers raved over the look.

4) Look at the small details.  Is the home and older one where a free standing cast iron mailbox on the path to the house would grab people?  If you have a mailbox on the house under the porch, get a nice one rather than the cheapest one you can find at Home Depot or Lowe's.  Consider putting on brass hinges or other trim pieces.

Hope these suggestions get you started . . . .

Knob and Tube wiring was fine when electrical loads consisted of lights and a few electrical devices that did not require a ground wire and more importantly was not disturbed over the years.  The old covering becomes brittle over the decades since it was installed and overloaded, can and often does pose a fire risk.  The fact that your property was updated in some areas and then left with the old knob and tube in others is not uncommon when home owners and electricians wanted to save a few bucks and do the bare minimum.

We have done almost exclusively older homes that had knob and tube wiring and found that even those with breakers and visible Romex were patched in to old wiring somewhere.  We have pulled wires that were showing signs of scorching inside walls that could have led to a fire. 

A few things to keep in mind:

1) If you found that the wiring is a mixture of new and old, you will need to disclose it when you sell it (most PDS have this listed) so buyers will be aware of what you have

2) If they have an inspection, they will find it and then more than likely provide you and your agent with that information which again, you will have to disclose

3) If there is a fire that can be tied to electrical, many companies will not cover knob and tube (check with who you have the property insured with as you do the reno)

When we look at a house that was built when knob and tube could have been used, we look at the incoming panel to start with but then 1) check EVERY outlet in the house with a tester to check for proper grounding, 2) pull one or two outlet covers / switches on the 2nd floor to see what wiring is in the box and finally, 3) pull a light on the ceiling of the first floor to see what wiring is used.  They are the likely spots that if there is any knob and tube remaining that it will appear.

With that, we do not leave the old wiring in place on any house we flip or hold.  Over the years we have found that there are tricks to rewire the entire house and all electricians are not created equally when it comes to rewiring an older house.  We found one that was when we lived in Michigan and his tricks have helped us find others that either knew the tricks or were willing to listen and implement them saving us money and him time.  If you are getting budget busting quotes you have either found one that does not know them or does not want the job and is simply giving you a quote that if you take it, he / she is willing to do it or even find someone else to do it.

What are the details on the house you are flipping . . . one story, two story, etc.

I would be happy to discuss some tricks on how to manage the price of a rewire.  

Talked to a friend of mine that does renos and he uses the Ring package . . . . self contained unit as well . . . . 

Here is a link to the system: Ring Security System (Home Depot)

Wanted to pass along another option to consider (of course other than a pair of Doberman's or Rotweilers :) )