All Forum Posts by: Lenzy Ruffin

@Mark Gallagher I do not. I was so charged up about somebody calling me with a house to sell, I ran out of the house without my camera. And photography is my hobby, so that was no small oversight for me.

@Mark Gallagher Definitely taking it as advice that I very much appreciate. I'd get nowhere if my rehab estimates continued to be way, way off.

@Mark GallagherThe seller wants $100K. As far as the assignment fee goes, that's where I put my error margin which was admittedly wide because this was the first house I've done a repair estimate on. I'll get all these numbers dialed in correctly with a little experience.

@Mark GallagherMaybe it's because I'm not established yet, but the rehab estimates I've gotten from contractors are significantly higher than the ones you listed. Double, actually, for the kitchen and bathroom renovation. Using the 70% rule, I was looking at an assignment fee of $16K which would leave room to negotiate with the seller and/or buyer, as necessary.

@Gilbert Dominguez You put a whole lot of "ifs" in your comment, man. I didn't do any of that stuff nor would I. I didn't even imply that I did. Please don't make up a hypothetical scenario with me as a shady character. I never talked to the executor of the estate (the son of the woman who passed on) about potential code violations or any of the other costs that went into forming my offer. I just came up with my offer and told him this is how much I can afford to pay for the property. I don't go out trying to convince anyone of anything.

@Mark Gallagher ARV $210K, repairs $63K, offer $68K on a 4/2 1200 square foot house.

I can't seem to find the repair estimate sheet I used, but I remember the total and what I factored in: electrical system replacement, new kitchen, new baths (2), carpet on two levels, demo/drywall basement walls and ceiling, replace HVAC components. 

There may be a couple of other things, but those are the major things. I used J Scott's repair estimate book as my guide. 

Thanks, @Jim Viens. I feel like my offer was about right, based on the safety issue you noted. I think the heir may think the property is worth more than it is because it is well-maintained. 

Just getting started with wholesaling. I inspected a lead I got from direct mail the other day and I'm wondering if I went way too low on my offer because I overestimated the rehab cost substantially.

The owner was an elderly lady who passed away. The house was built in the '60s and was extremely well maintained. Everything in it was ancient, but in perfect working order. The HVAC components were way old, but fully functional. 15 year-old water heater.  Fuse box and two-prong outlets throughout the house.

I submitted an offer based on the cost of totally renovating the house for retail sale. I'm new at this, but my assumption is that the electrical system has to be brought up to code in order to sell the house. Of course, the kitchen and bathrooms have to be re-done. Add on all the wood paneling removal and drywall installation, floor treatments, etc, etc. and it got to be a pretty good size rehab cost to prep the house for retail.

But like I said, this house was very well-maintained. Aside from all the wood paneling in the basement, the property is essentially in move-in condition for a renter. All the mechanical systems and the roof are fully functional. The house look great, cosmetically.

So my question is would the electrical system on this house have to be brought up to code for it to be used as a rental? My thought process was that a landlord wouldn't want a house that needed the electrical system re-done, which then made me view the property only as a "rehab for resale," which necessitated a bunch other stuff like kitchen, bathrooms, replacing old, but functional mechanical systems, etc.

If this property could have been legally rented without the electrical overhaul, I could have made a much higher offer. It doesn't bother me that I missed this one because I erred in the right direction (low), I just want to get myself properly calibrated so I can make "intelligent" low offers. I think I might have made an "uneducated" low offer on this house.

Thank you, @Jason Swan.

I'm new to real estate investing and I'm starting out with wholesaling. I understand the whole contract assignment or double-close process, but I'm not clear on what price actually gets recorded as the sale price. 

For example, if I put a property under contract with the homeowner for $40K and then I assign the contract to another investor for $50K, what gets recorded in the public records as the sale price, $40K or $50K?

The reason I'm asking is so I'll know what price I'm seeing when I look at comps for properties I'm researching. Often there are comps that were clearly sold at wholesale price, but I don't know if that sale price equals the contract price with the wholesaler or if it's the contract price plus the assignment fee. For a double-closing, I know what the latest sale price reflects, but for just an assignment of contract, I'm not clear on which figure gets recorded as the sales price. 

Will do, @Payam Dastmalchi.