All Forum Posts by: Jeff McNutt

I have flipped 3 houses with a partner we did all the work ourselves I have a good idea how to evaluate these properties doing the work myself. I want to step it up and be able to do more flips in a year. I have a full time job and do not want to focus my time on swinging a hammer. I want to be careful for this first one. Is there anything wrong with caller a contractor to see if they will meet me at a house I am looking at to give me an idea on costs? Does anyone think I can get a contractor to do this or will they see it as a waste of time. I want to get this thing going but this fear of not knowing my rehab costs is making it very difficult to run numbers and pull the trigger. It becomes a guess which is the last thing I want to do. Any advise on what people did when they first used contractors. Thanks

I would obviously need to get the seller down some on a 50k rehab but I don't think that will be a huge issue. and sorry I obviously didn't do the @ correctly

@Tom S I am trying to get a contractor in there to give me a better estimate. I know I could do it myself for just under $20k. It is very similar to the other rehabs I have done. I am totally lost when it comes to estimating the cost when hiring the jobs out. I will feel much more comfortable after doing one and knowing what everyone charges.  I am willing to make very little in this one to get the experience of using s contractor. The numbers would still work if rehab was 50k. 

I am looking for financing advice of any kind. owner financing is the first thing that came to my mind. I am hoping you guys/gals can help. Here is a quick picture I found a home that I am interested in. It appears it was purchased by an investor. Demo was started but not complete. It also appears the owner used private money. The house has been listed for over 150 days. List price 32,000 Rehab 30k (an educated guess at this point) ARV 85k 3/1 1200 square feet Safe rent 850 I don't have many detail at this point. I would go at this as a flip but would really consider as a buy and hold also. I have only done flips but want to get into buy and hold. Any suggestions/advice on financing. I was thinking owner financing would be a good starting place. Thanks

Originally posted by @Mindy Jensen:

@Jeff McNutt, $3,500 will absolutely NOT remediate the meth contamination in an active meth lab home. Consider this home to still be contaminated. Even if you missed a zero, and it cost $35,000, that seems low. I'm concerned that it was retested and cleared. An active lab would require the furnace/ac to be replaced, all drywall, possibly even the ductwork. And that is after the studs have been treated. 

Unless you can get a screaming, smoking deal on this house, it's probably not worth it.

 This is a foreclosure. The disclosure says the home has passed a "meth test" after remediation.  There is an invoice for $3,244.50. for 2 days of labor, Meth remover, encapsulation, dehumidifiers, heap filters, 10 yard dumpster, post test, certified affidavit report.  I am not sure but it looks like the lab may have been in the garage.  I would plan on replacing the HVAC and most if not all the drywall in the house (its a full gut most likely).

I agree with everyone my instincts are to run away, but the numbers won't let me stop looking at it.  i don't want to do anything stupid and buy something that I would lose money on.  I certainly don't want anyone to get sick as a result of living there.  But I do live in Missouri and there are plenty of former meth houses here.  I hate to pass on it if it can be made completely safe.  I guess i will try to put this one to bed and move on (that was even hard to type).

Thanks for all the input.

Jeff

Yeah. I'm wondering how much of a hit it will take. My realtor just said it makes it hard to sell and she had a deal fall through before because of a similar issue. I guess I need to talk with her more and get a realistic ARV. Trying to make sure I have proper exit strategies.

Ha. Thanks

Looking for some advice... I found a house that looks like a good deal on paper. I learned through the disclosures online that there was an active meth lab in the house. Work was done to take care of that issue (about $3500). It was retested and cleared. Has anyone delt with this? Should I immediately walk away or can this work with the right numbers? I know I have to disclose this. Would it make more sense to be a rental? Not sure if renters would care less about the issue, which again was fixed. Here are my early estimates. ARV-$135,000 not taking the meth issue into consideration About 40k to rehab Any thoughts on what a good purchase price would be.

I am a big fan of Dave Ramsey when it comes to matters such as these.  Not sure if he would say this exact thing but based on his books, podcast and my personal experience this would be my advise for you.

1. Set a detailed budget (and stick to it, bare bones minimum) you have to make sure spending is under control.  Its going to suck for awhile.

2.Save $1,000 fast! (safety blanket)

3.List your debts smallest to largest. Pay minimum payments on everything but the smallest.  Attack the smallest with a vengeance when that one is gone move to the next. (this will build confidence and momentum).

4. Sell everything you can (think outside the box)

5. Get aggressive with work, think outside the box like others have said.  You can make more money in less time if you think outside the box. (what are you good at that other people need, charge for it)

I have followed these principles and got out of a lot more debt that what you are talking about. You just have to be intense.  I am not a financial expert by any means but you can pay this off.  Good luck. Not trying to advertise for Dave Ramsey but his stuff really helped me out I would suggest looking into it.  If it makes sense run with it if not find some other material to help you pay this off.  Good Luck and get intense.

Ok, thanks for the advice. Any thoughts on the cleanest way for the two of us to make this happen, if that is the way we decide to go. I was thinking the LLC as partners would give more flexibility. Just not sure if one option stands out as being better than the other (any obvious drawbacks).