All Forum Posts by: Hattie Dizmond

Investing in a rural area can be tough, unless you have someone who really understands market value, for the exact reason you mentioned...lack of good comps.

Here's the issue, a total kitchen can run you $50k+, depending on what finishes you're using and how big it is.  A high-end appliance package can cost you between $25-35k.  Assuming this is an average home, with average finishes, and what you've listed here is all that is needed, I would expect that rehab to run me about $45k here in DFW.  That would also give me around $10k in contingency.  

@Jeremy Scott  Wayne is correct.  Just because it's listed as a short sale does not mean it is approved.  You need to understand where they are in the process with the bank.  The deals we have been involved with were much further along and had actually had a couple of offers fall out, due to issues with buyer financing.  If everything is locked and loaded, it doesn't take that long.  If you're looking at a situation where the seller has just been talking to their lender and is not fully pre-approved, then it is lengthy.  

Wayne is also correct that the listing price has nothing to do with the amount the bank will accept.  Even if they are fully pre-approved for the short-sale, it's likely the listing price is above what the lender would accept, because the homeowner is attempting to walk with something.  If they aren't pre-approved, they may have no idea what the lender will accept.

However, don't confuse that situation as the "time consuming" warning others have given you.  Most likely the "time consuming" warning was around a situation where you yourself are trying to help a seller work out a short-sale approval.  If the seller is already pursuing that option and motivated to get it done, you're just playing the waiting game.  So, if the deal is potentially good enough, even if they aren't pre-approved, you could just make an offer and wait.  It isn't going to create a lot of effort on your part.

First, I have no idea what you mean by, "My short term goals are to flip with long term buy and hold."  You can flip. Or, you can buy and hold. You can even go hybrid and buy & hold with a 5 year or so exit plan, which is generally an appreciation play. However, you can't flip with long term buy and hold. That doesn't even make sense. 

Second, you can't "think" the ARV is "around" anything. Being able to accurately assess the ARV is the life blood of a flipper and wholesaler. If you aren't sure, get help from a trusted realtor or don't do the deal. And, no one can truly comment on the deal without a rehab $ estimate. You need to figure out what level of finishes are expected in the area and estimate the rehab based upon those expectations. If you don't know how to estimate rehab costs, read J Scott's the Book on Estimating Rehab Costs, available right here on BP.

Now, if the ARV actually is $200k, and you can purchase it for $90k, then you would have $50k you could put into rehabs. But, that's a lot of assumptions.

here in Texas last recording date is the last time there was a change in the title to the property. The appraisal district also provides a title history, so I can see what the change was. That's important, because it could be as simple as someone removing a spouse or adding a Living Trust, neither of which represents a sale. 

just make sure they are at least solid core doors

there's a great thread in the forums with a lot of salient advise. Search "shoestring budget"

@Shaun Palmer you actually asked how many offers on a single property.  Is that really what you mean?  We generally make 1 offer and possibly 1 counter, because we know pretty well what will get us the property.

If you're just asking how many offers in general it takes to get any deal, then @Joe Villeneuve & @Bil Casimir are correct.  It completely depends on the market and how well you understand what it will take to get a deal accepted.  Here in DFW it's possible you make a strong offer at noon only to find out an offer was accepted at 10

Roy...ROFLMAO

You absolutely crack me up!!!

My first thought is why is your realtor telling you that"we" will do some high end rehab? Is the realtor doing a JV on this with you? Does he have any financial stake other than the commission, of you purchase?

Second...how in the heck does he think you're going to add a bedroom and get out of a "high-end" rehab for $35k????  I'm calling BS on that right now. And what are his qualifications for estimating rehabs?  Just saying. 

Finally, no baths on the 2nd floor, where all the BR's are would be a non-starter for me. Things may be different up north, but I'm not going to trek downstairs at 3 in the morning to pee. I will wind up in the hospital with any number of things broken. 

My advice, if you're really interested in this property is to pay for a BPO from another brokerage, if you don't feel you can estimate the ARV yourself. I have a realtor I trust, but he doesn't calculate my ARV,...ever. Also, if it's really a HUD property, it should be on the HUD store listing. But, it's possible it is some other insurer and the REA is using HUD generically. Press that issue.

I'm also going to say, the fact you have it under contract and "don't know what to do with it" makes me nervous. 

You are tying up a seller's property. If this is a business for you, then treat it as such. You should have a plan...a written one.  You have no liquidity and bad credit. Your plan should be how are you going to get to the point where those 2 things are no longer true...at least one of them. 

Your plan should also include how you will evaluate deals and determine an exit strategy, so you don't get caught in this "bright shiny object" space you are in now. 

Look...if the deal is that great, then you can lock in a higher wholesale fee, while still giving your investor buyer meat on the bone. Keep looking for great deals and banking those wholesale fees. If you continually source great deals to great buyers, you're likely to find an investor who is wiling to do a JV with you on a flip.

Like Ned, we wholesale deals, when the timing isn't right for us. We have a slam dunk deal right now that we are wholesaling, partly because we have our capital tied up in a couple of other deals. It's killing us, because it would be both fun and profitable, but another deal will come.