All Forum Posts by: Robert Taylor

Wow, I would've never thought of doing that @Bryan L, that is a GREAT idea! Sure, it costs a few extra bucks to register but I totally see the benefit there, I've been through it several times when we've bought houses in just that situation, where not long ago it sold for a much lower price and even though we did work, often extensive work, the buyers just don't get past the idea that I bought it for say $200k less than a year ago and now its listed at $329k. I especially run into this when I buy them off of the mls, such as an REO or short sale, which have probably made up about half of my recent projects. The ones I've bought at the auction are more obscured, they're not listed on the mls and zillow and all those other sites that list recent sale prices. Adding to that issue is the fact that I usually aim for some higher priced projects, nothing too fancy, but nothing too low priced as I think there are too many flippers competing for the "cheapos".

I was selling one house last fall that was listed for $469k that we had bought off of the mls in that same year for I think $280k. The place needed work when we bought it, nothing too major it was built in 2001, but the former owners took not only the appliances but all the lighting too. Besides that, I don't know who in the heck lived there but it was DIRTY, especially the kitchen which had a nice coating of grease on everything! It hadn't been painted in years, inside or out and was just looking very tired, way beyond its 12 years of life. So, we did quite a bit of work there, besides cleaning and degreasing the kitchen literally for DAYS, we painted inside and out, replaced several expensive casement windows that had small leaks, updated most of the plumbing because it was a garish looking chrome and brass that was probably already going out of style when it was built, all new top of the line appliances, etc, etc. We spent quite a bit and even selling at full list price, it was profitable but not a huge money maker. Now, there were two PERFECT comps, two houses sold on the same street, one almost across the street, one the same sq footage, one slightly SMALLER, sold within the last few months. One sold for $489k, one for $485k. So, ours was listed for 20 grand less than either of them and while they were both in very good shape, I toured one in an open house and had the mls pics of both, ours was TOTALLY refreshed, inside and out, ours was arguably in BETTER shape! Yet, I had several calls for showings where the flip subject would come up, several times I was asked about the much lower sale that same year. Of course, every time I'd have the list of work that we did there to rattle off to the other broker as well as the two perfect comps and yet they'd still be questioning the much higher price it was now listed for! I also had two different very interested buyers who were really looking for a "deal" and who, according to their brokers, just couldn't get past the fact that we'd bought it for nearly $200 grand less than it was listed for just a few months earlier. One of their brokers even told me that he tried to tell them that the value of the house is in the comp sales, not in a previous sale but they wouldn't listen! He called them the "profit police"! That's the stuff that I'm trying to get around here, by creating some sort of value beyond just having a list of stuff we did to the house.

I wouldn't be spending money on advertising or anything like that, it would just mainly be to create a website for the business and as I said earlier, try to explain some of the work we do and that we do it correctly, pull permits when needed, don't cut corners or cover up problem areas, etc.

I've been flipping houses full time now for about 2 years, I did it part time from around 2004 to 2007 and got back in a couple of years ago when I saw and heard that the market was good again for flipping. In my first year, I did 6 houses and now this year I've been picking up speed, I have three projects going simultaneously right now. These three will all be done within the next few weeks (hopefully!) and on the market. I'm already looking for more projects and want to find at least one soon for the "next round"! I would like to branch off into some other methods of RE investing, like holding some properties as rentals as well, but I know that I will continue flipping as long as it makes financial sense. I did get out of it around 2007 because I could see that "everyone and their brother" was getting into flipping houses and prices for project homes were getting bid up too high to make good profits. As long as the market makes sense, I'm going to continue flipping because I've learned a lot so far and I think I have a pretty good system going by now.

One thing that I've been thinking about on and off for a while is trying to create sort of a "brand name" for my flips. Just as nearly any new home builder with a halfway decent reputation uses their name to advertise their homes, I would like to have a name to advertise mine that will hopefully create some extra value for my projects and make them easier to sell.

I came to the conclusion that a brand name would be a good idea mainly from hearing of or getting hints at buyers attitudes towards flip projects, which I generally consider to be somewhat negative. One good example is from my experiences selling the houses so far. I have my RE license and I'm the broker for my flips. I take all of the calls for showings myself, I don't farm them out to a service, I think its better to have contact with the brokers showing my homes, if you rely on a showing service to take the calls and set the appointments, I think its far too easy for brokers to avoid you completely and avoid giving any feedback.

One thing that I've heard many times over is the question from the other broker, "Is this a flip?" Nearly every time, the tone of their voice strongly indicates to me that they don't necessarily think its a good thing that its a flip project and I guess I can't blame them. I know that some flippers have made things tougher for the rest of us, the guys that cut every corner they can, don't pull any permits when they should, cover up things that really should be fixed, etc. Plus, I don't think that many of the various flipping TV shows have helped, they seem to create an image of flipping as being a way for people to make outrageous profits overnight and also to cut corners.

So, I'd really like to create a brand name for my projects, something like how a new home builder uses their trade name on the houses they build and sell. I'm just looking for opinions on if its worth the time and effort needed to do that. I'm already a pretty busy guy, although I have some free time, but I don't know if the possible results are worth the effort.

I'm not looking to spend money on traditional advertising, I'd mainly look to sell my brand name through a website that I'd develop or get help developing. I'd have pages for any current homes for sale, maybe some pages with pics and info on recently sold projects and some space dedicated to ongoing or upcoming projects. I'd also devote some space to trying to push the fact that I do these projects the RIGHT way, I pull permits when needed, I don't cut corners, I don't cover things up that should be fixed. When I put out the sign for the realty company that I sell through, I produce the usual "pretty sheets" for each house, stored in one of the little plastic boxes attached to the sign for people to take one. I would put the website address on there in big letters to hopefully drive any interested buyers to my website.

So, I'm wondering if people think it would be worth the effort, do you think I could overcome certain buyers objections to buying a flip project and do you think that the results and benefits are worth the time I'd need to invest to make it go? Also happy to hear any other advice or ideas related to this as well!

Thanks again for the responses everyone. I'm going to go down two different avenues here, I'm going to attempt to contact the current owner and also work with the bank as well. Technically, the bank doesn't yet own the house, that will happen on April 7th after the auction sale is confirmed by the court, which goes through probably 99.5% or more of the time. I just remembered I (or actually my brother) has a contact with a fairly high up guy at this bank, which is a pretty big bank, without that contact, I don't know if I'd get anywhere attempting to deal with the bank BEFORE they turn it over to a 3rd party asset manager who will simply list it with a local realtor. As I think I mentioned, I know another investor who has managed to snag a few properties by getting them before the bank turns it over to the asset manager.

I'm also going to contact the owner and go the route that @Brandon Lee @Brandon Lee

mentioned, that if we can get the bank to do a short sale, it will help to save their credit rating, or at least the hit won't be quite as bad. I think that's the only leverage I have with the owner, since it looks like they're already gone.

I'd be interested to hear if anyone here on BP has also managed to snag a property from the bank before it was assigned to an asset manager or listed with a realtor.

PS @Dawn Anastasi

if you'd ever want to check out a Milwaukee sheriff's auction, we can do a field trip sometime! They're somewhat interesting, especially if you have your eye on one or more properties!

@Account Closed -the reason why I didn't just buy it at the auction today was because I wasn't able to get inside and do any inspection at all. Being in WI at the end of winter, especially after the ridiculously cold winter we just had and seeing that it looked vacant, I was worried about freezing pipes or other winter damage if the heat had been turned off. Besides the regular DWV plumbing, the house has hot water heat, so those pipes and radiators could've been damaged as well, potentially causing HUGE amounts of damage. I'm hoping that by getting a hold of the owner and offering him some sort of solution, I can also get inside to inspect it.

As far as the opening bid amount at the auction, the vast majority of the time the opening bid is somewhere right around what is owed on the property, which is pretty much always more than its worth. Yet, for some reason, occasionally they will drop the bid down in price on certain properties and those are the few of them that are worth buying at the auction. I used to subscribe to a service that would list all the data on each property each week, including what was owed, but I dropped my subscription a while back and haven't renewed it yet, so I don't know what was owed on it.

@David Krulac-I did run title on the property and this was the first mortgage that was foreclosing with no other mortgages. Yes, I guess contacting the owner and seeing if they looked into doing a short sale at all would be a good idea and if they did, what the bank's number to buy it out was. I have the cash to buy it for what the opening bid was at the auction today.

If there's no chance of working with the current owner, then I'd wait until after the April 7th confirmation hearing and then contact the law firm handling the sale for the bank and see if I can get an offer in before the bank hands it over to a 3rd party asset manager who will hand it to a realtor to list on the mls. I know a guy here who's done that several times and bought properties before they were listed on the mls.

I guess what I'm looking for here is any advice anyone has on how to approach the owner. I found the guy on Facebook, so I could send him a message through Facebook to contact him that way. He's made recent postings, so he's active on Facebook, I was thinking that might be a less threatening way to contact him as opposed to sending a letter. I'm sure he's received a lot of letters recently regarding this foreclosure and other debts that he likely has as well, so I'd think that my letter would likely get tossed along with all the other ones.

Between my brother (who is my partner) and myself, we've bought at least 40 properties (residential and several commercial properties) at our local sheriff's auction over the last 10 years. As is common with a lot of local auctions, here in Milwaukee County at least 90% of the properties going through the auction are bought back by the bank that's foreclosing, they've set the opening bid amount too high to make buying it at the auction make any financial sense to buy at the auction.

This also brings to mind another possible strategy, dealing directly with the soon to be former owner who's losing the house. Here in WI, the sale is not final when the house goes through the auction, it is finalized at a confirmation hearing, which is usually about 3 to 6 weeks after the auction date. So, for the house I'm interested in, it went through the auction today, March 17th but the sale won't be finalized until April 7th at the confirmation hearing. So, the soon to be former owner has these last 3 weeks to possibly save their ownership. Usually nothing changes and the sale goes through, although occasionally something happens, often its saved or at least put off when the owner files for bankruptcy, although if they're somehow able to come up with the money, they can save it that way, too.

I'm wondering if anyone here has had success dealing directly with the soon to be former owner of properties?

I have the cash to pay off what the amount was that the house sold for at the auction today. I know that you have to be careful when dealing with the owners, due to all of the "foreclosure scams" that have been done lately, but I'm simply looking to first get inside and see the house to make sure its still in decent shape and then to contact the bank to see how much I could buy it for or how much to pay off what they owe. I did find the owner on Facebook, so I have at least one way to contact him, it looks like they already moved out of the house.

I would think long and hard before living in a house that you're going to be renovating in any serious way. I've done it on my own and its a PITA at times and not to say I'm a dirty guy, but I've never been someone who needs everything to be all nice and neat and clean around me, as long as its liveable, I'm OK. Yet, when you get into different stages, like when the inevitable cloud of dust is constantly coating everything you own, including the bedsheets you sleep on that you just washed the night before (for the fourth time in 2 weeks because its so damn dusty in there!) it can get old really quick! You'd hate to put an undue strain on the early days of your marriage because you're living in a constant construction zone!

That said, it can be done and if she's up for it, yes it could be a great way to quickly build yourself into a much nicer home. I would just make sure that both of you really know what you're all getting yourselves into!

Hey Mike, if you'd like a personal opinion on which way to go with what or how much work to do to your house from someone that is both a RE broker as well as who flips a fair amount of houses himself, I'd be happy to come and take a look for you, do a little research on what's out there recently sold and currently listed in your part of town and price range and let you know what I'd do or what I think you would want to do. Basically, you're looking at doing your own possible flip project, you're in the same shoes I'm in after I pick up a house at the auction or from wherever and I've got to decide which way and how far to go. Let me know!

Thanks Michael, good info!

Thanks John, that's surprisingly close to what I was thinking, dollar-wise.

I should clarify that its not really an "off-white" for the ceilings so much as a white different from the standard ceiling white, if that makes any sense. On another recent project, I hired a designer who's picked colors for me for several rehabs now and she picked some whites that weren't your standard "chalky ceiling white" that they always sell as ceiling paint.

Have you tried Behr paint? I love the stuff and I've done quite a bit of painting myself. I had accounts at Sherwin last year and at the local Ben Moore retailer as well and I really prefer the Behr. I think it covers much better, the only complaint I've heard is that because its pretty thick, it can be a bit harder to cut in with it, but not that bad.

As I've mentioned in other posts, for this current "crop" of projects, I'm subbing everything out, no more direct hire employees for me, at least for now. Tomorrow I have a couple of guys coming by to give me some estimates for painting the interior of one of my project houses. I did some searching of prior threads on here, but wasn't able to get too many solid answers for what I'm looking for, so I'll tell you as much as I can think of here about the house and the paint job:

-Its a 1700 sq foot, 2 story house that's just had new drywall installed on over 3/4 of the walls (we demo'd most of the ceilings for new wiring and insulation and a lot of the walls were pretty messed up, so it was easier to go over them with new drywall than to attempt to float them smooth with compound, etc.) and the walls that were left original were pretty straight and any cracks in them were patched, mudded and sanded smooth by the drywall guys. They then sprayed an orange peel texture over all of the walls to help them all look uniform. There's a total of 9 rooms counting everything (4 bedrooms each approx 8 x 12, one dining room/living room combo approx 25 x 12, kitchen 12 x 12, foyer 10 x 12, one full bathroom and one half bathroom) and everything needs painting.

-I'll probably stick with 3 or 4 shades of color, each room will have one wall color and an off white for the ceiling. I'm not doing accent walls or multiple colors in a single room or anything like that, it will be pretty basic. Colors will all be fairly neutral, I'm not going out an any limbs here!

-The walls will obviously need a primer coat with all of the raw drywall. For the paint itself, I always buy decent paint, I really like the Behr paint from Home Depot, I've done a lot of painting myself and have tried even the more expensive ones like Sherwin's Emerald and Duration on my own house and I really like Behr. I've also tried my share of cheap paint as well and I find that you get what you pay for! I will be supplying the paint, I get a 20% discount on Behr paint, so whoever paints it will be painting with decent paint. I'd still anticipate one primer coat and two paint coats, although with the Behr paint, it seems like the second coat is usually a quick one.

-Upstairs, there is some trim to paint as well. Downstairs, the woodwork is all stained, which I will be leaving as is, it looks very nice.

So, I'm wondering what people are paying for painters these days, like a room price to go by here, as I'm pretty clueless right now. I want to avoid paying someone by the hour and leaving it open ended like that, I always prefer to get either a flat rate or IF they really want it hourly, I want a not to exceed price.

Any other general advice here is also welcome! Thanks!