All Forum Posts by: Andy Sabisch

We have bought properties from HUD as well as the VA, auction sites such as Hubzu and Auction.com and done well in the end. As Randy said in he previous response, make sure of your numbers to see if the deal is a deal or priced for an end-buyer to buy it. We had a home run off of Hubzu last year but you really need to do your homework. There have been a few that were listed as vacant yet driving by, there were people living there and clearly not ready to leave. Unless you want to deal with the people that are squatting through cash for keys or eviction, I would stay clear of those properties.

We have done a number of older homes and looking at the photos, a few things stand out.  First, the person that was doing the reno got in over their head and did not understand how to do an older reno.  Carpet before the walls and paint is a no no.  The quality of the work in the photos (as good as you can see with the poor quality photos) leaves a lot to be desired which means rework.  You need windows, flooring, structural and you have not even looked at the electrical, plumbing and HVAC.  Even the roof is suspect from Google Street view.

Not sure about what the neighborhood but using the Rent Estimator tool on BP, it shows a rent of $1,475 with a high confidence value.  With what you have left to finish, I would ballpark $40 / ft2 so at 1,812 ft2, you are looking at about another $70K to finish it off with mid quality.  You can run the numbers with the calculators on BP but if we were entertaining an offer on the property especially if you want to build equity and pull it out when you refinance (BRRRR), I would go in no more than $30K to $35K.  Looking at the similar homes at the bottom of the link you provided show nothing over $100K and a lot near $50K with less work needed to make them rent ready.  

As far as why this one is for sale, I think the investor that bought it found out how much work was left and threw in the towel.  We have seen houses where someone bought it to flip and underestimated the repairs and found themselves underwater.  Don't trade your life boat for the Titanic

Exactly . . .. doing one now and the reno work then painting and finally flooring . . . last thing you want is to have anything mess up the new flooring

It depends on your location as some areas / counties do not have this data available online,  You will likely get responses about real estate investor applications that can get you that information but cost a good chunk of cash and come with other features but you may not need.  

We use an application designed for hunters called HuntStand.  You can put it on your phone or computer or both.  It shows ownership information and provides a mailing address as well.  Is it 100% accurate?  No but then again the data they are pulling is the same as the data the expensive investor-focused applications are using so the output on any of them is only as good as the input.  HuntStand only costs $29.99/year for coverage across the US.  It has been spot on for when we needed that information.  Worth a try and you can always go another route if it is not getting you what you want but remember, data is data regardless of how it is packaged.  

https://www.huntstand.com/

Hope this helps

That is why having a solid project manager when you are doing a long distance project is critical as well as a contract that has specific milestones defined, draw amounts laid out and penalty / incentive clauses that all parties can agree upon before the first boot hits the property.

Hopefully your PM has given you a detailed summary of where things are, what the timeline to complete the remaining items is and what the delays were that impacted the 5/15 target completion date.  Once you have that, you can determine where fault lies and what the best course of action is.  It may be that depending on what is remaining, see about getting specific trades in such as drywall, paint, landscape, etc. to get the work done faster.

Good luck

As they say, everything is negotiable.  I have some contractors that want nothing up front (usually smaller jobs), others that want 1/3 down and others it depends on the scope of work and our track record together.  Not sure there is a one-size-fits-all answer.

I will say on a few occasions when we got started we went with contractors that we had not fully vetted and price drove selection and as a result, the last we saw them was after we paid them up front.  If the contractor has been in business for a while and you have checked some references or been referred by another investor, then their terms will be at best a starting point for negotiation but typically they are how they do business.

Check with your HML to see how they would handle a 50% up front payment - they may have ways to structure the payment to make you both happy

Have you contacted the company that did the work?  We had a house repainted a few weeks ago and it rained unexpectedly and they came back and addressed  the issues from the rain.  I would reach out to them as they knew what the downside was if it rained and should have checked the forecast before starting the job.

Pay head to the input from contractors here . . . . we deal with a number of contractors and I can say without a doubt that if I gave them a contract to sign (instead of them giving it to me), they would laugh and move on to another client.  If you get a contract from a contractor that is light on details or has sections you do not like, ask if they are open to changes or say you can't sign it.  If the contract is a large $$$, then get your attorney to review it but you will pay for that service.

The contract is the contractor's proposed deal with you not the other way around

As others have said, walk away there are other deals out there.  We have found that the legal system allows you to win the battle and lose the war.  We have gotten judgements but considering the time, expense and hassle, they were not worth it. As the old song went "You got to know when to hold them and when to fold them" and if you are looking at legal actions, you are usually the only one that is not going to make money in doing so.

Cash flow is just one metric.  Have you compared the ROI on the two properties?  It may generate the same cash flow but there are tax benefits tat you can reap with one that you will not with the one that is totally redone.  The BP calculator will give you other metrics to compare which may help you in your decision.