All Forum Posts by: Dell Schlabach

We buy and sell about two a month on average to other rehabbers, these are mostly mls properties. 

We sell them to cash buyers no contingincies.

We will have a rehabher lined up to buy before we close, we typically close with our buyer within a couple days after we close on the purchase. 

@mark braun    in order for this deal to work with the numbers you are proposing, the bank would be eating the 83k shortfall, as @Wayne brooks mentioned.  Ther bank isnt going to take that kind of a discount. In other words there is no deal here to be had to wholesale. Homeowner owes too much. 

@Ian Richardson ...wondering as well if you ever received a satisfactory answer, and what happened with this deal, what your brokers viewpoint was, if you ran it past him.

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Depends on your objective, what do you want to accomplish? 

Just remember the team is only as good as the leader. 

Can I ask you a question

If I borrow all the purchase and rehab money on a flip, if I buy it for 100,000, put 70,000 into rehab, and all related costs, Profit of 30,000, what would my rate of return be?  

You mentioned you want to double your money.... you want to buy with your cash, say you buy for 100,000 spend 50,000 on rehab and related costs, you want to make 150,000? 

If you can do one flip a year you would need to make 150,00 per flip, if you can do two flips it would only require 75,000 profit per house to double you money annually. 

At 37,500 profit per house, doing two a year in this scenario would give you a 25% return. Not impossible, but a challenge. 

If you leverage with 5-8% loans and only use some of your cash on each house you can increase your onw cash on cash returns

We have done it multiple ways....

....adding the partner to the deed after you close

... draw up a basic one page outline of our agreement, payments, profit splits, payback, etc. The partner who is not on deed gets a mortgage roughly equal to half of the expected ARV.

We got two properties under contracts this week on mls properties, we already have contracts in place with two different rehabbers to sell to them as soon as we close. 

This is not a strategy I would recommend to new people, because of the knowledge and access thats required to be good at it, but if you have special knowledge, access, or systems that allow you to beat the competition, you can make money off the mls in some areas. .

If you are good at finding deals, and dont have your own funds, hook up with a rehabber that can provide you with funding or proof of funds letter, a copy of bank account balance is what we use.

Nice remodel.... 

as someone previously mentioned its possible the inspector looked along the bottom and saw a starter strip/upside down shingle  and confused it with an extra layer. Once you have a definitive answer you can make a proper decision. We always tear off before we install new, but we inherit a two layer occassionally, although the inspectors typically note it on home inspection reports, it has  never nixed a sale for us. 

If you have a licensed electrician evaluating your property, knob and tube still passes code in many areas, In our area I see a lot of houses where they upgraded the panel box and ran new wire to the kitchens and bath, installed gfcis and the rest of the house is still on knob and tube. Locally it passes code as long as ungrounded has two prong receptacles, and not three. 

Recently got flagged by a home inspector for having a copper water pipe running across the top of an electric panel box, there were five different flags for electrical items that all made it onto the high level potential hazard section of the report, the buyer walked. Send the report to my electrician, he reviewed the items and said there isnt one that is a code violation for existing homes, this was was a 20 year old house,  we had not done any of the electrical work, except swap out some lights. Sold the house the next weekend, next home inspector did not flag any of the electrical items. 

always interesting

Congratulations on making the decision to turn your life around! 

The starting point is hope, which it seems like you found recently, then belief, which comes by reading and hanging out with people who are doing what you want to do and who can encourage you, 

Its not easy, but its possible, when you make definite decision about what you want, put a plan together to achieve it, then develop consistent habits to turn it into reality. 

Wish you the best 

If you are selling it at retail, how is that wholesaling?

Are you asking if you can assign your contract, where your buyer gets a conventionial loan and you get paid 15,000 assignment fee?