All Forum Posts by: Christopher Brainard

When I first started flipping houses, we had a 100% win rate. Quite frankly, we were paying too much. As i became more seasoned, we've been offering progressively less and less and being far more picky about the projects we take on. This year, we've had about a 30% acceptance rate, with 5 purchases total. We've had a couple of properties get away that I wish we had bought, but you can only do what you can do, right?

-Christopher

Find a great deal - then finding an investor will not be an issue. Thousands of people every day are looking for financing, but having a property in hand shows you are serious and shows that you understand how to make a profitable venture. Please make extra certain that the deal you have is a deal, otherwise, the investors will blow you off. Once you have that deal, you can find a cash partner by going to your local REI club, checking out the marketplace here, or just doing a Google search for hard money in your area.

-Christopher

Felix,

I think your issue here is the word 'own' and I do not agree with your statement. You don't 'own' a property by having it under contract. You own it when the deed is conveyed to you by the seller. This is why wholesalers are getting into trouble. You can advertise that you have a contract for sale, but you can not advertise that you have a property for sale, as you do not. Can you show someone the property? Probably not, because you don't have equitable interest, therefore, this could be construed as marketing someone else's property. Its a convoluted situation and one I would personally avoid.

-Christopher

@Aref Shehadeh

Unfortunately, the 8% most likely only covers routine administration of the property. That would be collecting rent, answering the phone, sending statements, maintaining records. It's likely that anything else is going to be an additional charge. This is the primary reason that I do not and will not use a management company. They tend to make more profit from the property than you do, unless you pay all cash.

I agree with you that normally I would expect late payment collection to be covered under administration. This seems a bit greedy to me. You should read your contract with them and explore other options. 

-Christopher

P.S. Wait until they charge you a month's rent (or more) to fill a vacant unit. This is the charge that bothers me the most. Pay for poor rental unit performance. 

@Shawn Connors

I'd be very careful on a few fronts. 

The first is that Zillow should never be used to determine value of a property that you are giving serious consideration to. Perform a proper CMA and get a firm number and estimated time to sell.

The Second issue is your idea to take this subject to the existing mortgage. I assume you know that this means you will inherit all the defects on the property:

• All Mortgage Payments Owed
• All Taxes Owed
• All HOA Fees Owed
• All Liens on the House
• Legal Fees (Probably Near Foreclosure)
• Etc

Given that she hasn't paid anything in 2.5 years, that could easily eat up all the equity you currently see in the deal. If you have that kind of money, you would most likely be better off purchasing the home outright and doing a short sale with the bank. 

-Christopher

I doubt you screwed yourself out of a deal. I believe Arizona is a community property state. If the husband and wife can not agree to sell the property together, I doubt they will agree on the money split and signing the papers. It's highly likely that you inadvertently saved yourself a lot of trouble.

As far as calling the other wholesaler, I don't think I would have done that. If the divorce thing wasn't a factor, I would have made my offer at whatever you feel is the proper price and see if they accept it or not. Real estate is highly competitive and good deals often have multiple offers. I will caution you, however, not to increase what you pay to try to "beat out" the other guy. Property is worth what its worth - No more, no less.

-Christopher

Hello Everyone,

I have a friend who just accepted an offer to relocate to Edmonton, Canada. I'm looking for some general info about the city and getting some suggestions on the best area around there to find quality, affordable housing. She will be working near the Southgate Centre and is looking for something that would be an easy commute. Any suggestions or recommendations would be greatly appreciated - we plan to head up there next month to lock down a residence.

-Christopher

1) Do not overpay for a property. Profit is made when you buy, not when you sell.

2) Do not overimprove the property or personalize it. The goal is to make the property sell for as much as possible and appeal to the most buyers. Don't let your personal tastes get involved.

3) Do the kitchens and bathrooms right. They are the primary selling features and should really pop.

4) Do scout the competition before you choose the finishes for your house. Understand what the standards are for the area and ensure your house beats the competition.

-Christopher

I would give you the Slumlord of the Year award!

In all seriousness, unless this is a Class C/D property, buying a very small, very cheap, used fridge from craigslist is pretty insulting to your tenant and reflects how you expect them to take care of the property. After all, if you don't care about the property and how it is furnished, why should they care about how it is maintained? Additionally, since they rented it with the current fridge, I understand how they would expect a like-kind replacement.

There is a middle ground between buying that and spending $3000 on a new, state of the art fridge, and I think you would have done well to find it. I'm sure if you spent a hundred or two more, you could have found an equivalent used fridge to replace the old one. Personally, I would have went deal shopping and found a new fridge at a deep discount - scratch and dent places are great places to find these types of deals.

-Christopher

P.S. In my opinion, 19 sqft is small for a family of four. Excluding the freezer, you should have about 5 sqft per person in the house of storage space. This size refridgerator would be fine for a bachelor or a couple.

@Jeffrey Hayes

I've had similar issues and it is something you should get used to. There are many people who overpay for flip properties, but that does not mean you should. There are a lot of new people entering the business who don't fully understand the numbers and tend to overpay. There are also some established people who are so hungry for a deal in a hot market that they will overpay, as they already have the crews in place and have to pay them regardless if they are working or not.

The MLS is not a great place to find flips in a hot market, too many people fighting over too few properties. If it is your only source to find properties, make sure you have the first offer in and that it is cash. I've also found that having no contingencies makes the offer more appealing as well. Eventually you'll hit pay dirt on a property that you can make money on.

-Christopher