All Forum Posts by: Chad Shultz

Jule,

I may be able to help you.  I am a local, Daytona Area, Licensed RE.  I typically only work with investors, so your project may fit.  We can certainly chat to see how I might be able to help out.  Please shoot me a PM and I'll reply with my contact info.

Investment Info:

Condo fix & flip investment.

Purchase price: $80,000
Cash invested: $109,000
Sale price: $160,750

Found a condo that we felt could be a quick, easy turn. This one was set to go to public auction for foreclosure. While bidding on the foreclosure, the auction was stopped and removed from the docket for the day. This was strange, so I looked into it more. I was able to contact the owner directly and meet in person to discuss the situation. I found out the owner stopped the foreclosure by filing a bankruptcy the morning of the auction.

What made you interested in investing in this type of deal?

This was a simple project with only interiors to worry about, since the condo took care of everything outside. It was a small space overall, compared to many projects we do, so we knew we could get in and out quickly.

How did you find this deal and how did you negotiate it?

After speaking with the owner who was in foreclosure and bankruptcy, we arranged a contract. We had the owner put the condo into a land trust, so we could purchase it inside the trust and avoid a public visible exchange. Within a week, we were working. The complete interior renovation took about 5 weeks, minus Thanksgiving and Christmas. We listed the first week of January and got a contract within 30-days. Buyer was cash. There was only one set of closing costs, so we saved there too!

How did you finance this deal?

This was a cash deal and we used our own cash to fund the deal. This allows for more profit, since we were not paying interest.

How did you add value to the deal?

Complete interior renovation, including HVAC.

What was the outcome?

We wound up making about $50k+- profit overall.

Lessons learned? Challenges?

Some condos have "first right of refusal" clauses in their docs. In this case, if we advertised we were purchasing for $80k to the rest of the owners, someone would have purchased it out from under us. In a Land Trust, we were able to do a contract for beneficial interest, thus not making it a public event and we were able to circumvent the "first right" clause. After the reno, when presented with the contract of $160,750, none of the owners exercised the "first right" and we closed on sale.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I handle my own real estate as a licensed agent in Florida.

@Druce Asah: 

First thing, and most important... Wholesaling is a buzzword right now.  There are many, many so called "wholesalers" who have no clue what they are doing and they are the reason wholesaling is becoming unlawful in some states.  They don't have a clue what repairs cost, they don't treat sellers well, they don't know how to price properties and they give everyone in the investment arena a bad name.  You need to stick to your numbers and your formulas.  Let the poorly organized "wholesalers" die off when nobody buys their offerings.

@Thomas Franklin - overall, you have great information, but most people I know would not get out of bed for $20k as a starting point. The correct MAO should be ARV * .7 - all the other stuff you mentioned. I have never seen anyone teach MAO as 80% ARV, until the market went crazy in 2022-2023. This was when the so called "wholesalers" couldn't stick to formulas because they would lose out to the next guy who cheated the formula, so they started cheating the investors who actually handle the flips and changed the formula to 80%. There are always surprises and 20% in most deals won't cover the bills. Once people figure the proper MAO, they can adjust accordingly, depending on the project and their experience. Even better, investors should stop using wholesalers and find their own deals where they can get them for ARV * .6 or better.

Hey Jule: Nice to hear about your upcoming project.  I am local in the Daytona Beach & Ormond Beach area.  I have personally done about 50+- projects in the area, mostly fix and flips.  My projects are not a "typical flip", but rather a professional renovation on a property.  I usually set sales records in the areas where I complete a home.  I do this because I like to stand out from the typical "flip" person.  Typically, "flip" is a word that scares buyers because many people have a history of no attention to detail and not completing projects correctly, or covering up issues instead of addressing them.  I am also a licensed realtor in this area, so I am very familiar.  I would be happy to go by your property and take a look to help you evaluate the situation, so you can make a better decision on how to proceed.  I can also help you with recommendations of responsible and professional workers, so as to eliminate a lot of the trial and error that comes with contractor hunting.  Send me a PM, if you want to chat more.

Hello Jared:  I am licensed and live/work/invest in Ormond Beach.  Send me a PM and I’ll give you my phone number and contact info.

Bradley, welcome to real estate investing. You are taking a step in the right direction. Most people just talk about it and never take action. I hope I can help you get that next step accomplished. The first, and most important, thing you can do it find a local REIA where you can actually go meet people. Your local REIA will be full of people who have stood where you are standing and they took that first step. These people are there to help guide you. You will find NO BETTER RESOURCE than meeting like minded people in person and networking with them. I have experienced this all first hand. I started with my local REIA chapter in 2017 after having done only two properties. Since then, I have done over 50 properties, a motel in Georgia and several larger scale projects. I have investors ready with simply a phone call to help put a financial deal together, if needed. All of this has actually allowed me to finance my deals with profits from previous deals and I rarely need to borrow money these days.

If you are serious about taking that next step. Make it to your next local REIA meeting!

Investors should not fall victim to the broad statement that there is a "housing crisis" anywhere. It is a scare tactic.  Any seasoned investor knows you make your money on the PURCHASE, not on the SALE.  If you do your homework, follow your common sense formulas and use real rehab costs/expenses, there really is no such thing as a housing crisis.  Add to that the USA is still 4+million housing units short, homes still sell.  Yes, they make take longer, but if you buy them right and price them right, you will always sell first.  I just finished a project in the area that sold in less than a month just about at asking.  It was on the market less than a full month and it was a Condo, no less, which are more taboo than anything else out there.  Historically, the "...best time to purchase a home is always five years ago."

I do a lot of properties in this area.  I would like more info.  Please send an address, so I can do some research.  You are welcome to send it in a PM, rather than publicly post.

Hello Robert,

I invest in the Daytona area.  I have a few holds and have done over 50 Flips in the past few years.  If you want to connect and chat about the area sometime, let me know.  I'll be happy to try to help you start off "on the right foot."

Hello Joao,

I have a few contacts in the Daytona area.  It really depends on the extent of your project.  When you say "General Contractors", are you planning a large fully permitted job, or something smaller that does not require permits?  Most people use the term "general contractor" interchangeably when that's not what they are actually referring to.  We can certainly chat about it, if you like.  I have a great source for LVP and kitchen cabinets, plus great tile guys too.  I do many flips in this area, so I am familiar with most anything you could be up against.  Feel free to send a direct message and we can go from there.