All Forum Posts by: Marty Boardman

If you've never attended a live Sheriff's sale it can be extremely intimidating and overwhelming. Even the pros get nervous at these auctions. If you have a chance I highly recommend you attend at least once, and up to 3-5 times so you can figure out how it works (and who the key players are). In city the size of Pittsburgh there will be pros in attendance and they don't like new investors sniffing around. They're very territorial and will bid up the price of the property so you won't ever come back. You may be better off with working with one of them so they can bid on your behalf.

There's no way to see the inside of the home and that's a huge risk. I like to make contact with the owner prior to the auction to see if they'd rather sell (and save themselves from a nasty foreclosure). Even if you can't make a deal maybe they'll let you inside to see what works is needed.

Good luck!

I took a class once from a real estate attorney that used to be an investor. He said he did this so he could kill his own deals. Hah!

I'm no lawyer but my advice would be to start a separate LLC strictly for flipping. This could be a pass-through entity that pays your S-Corp to manage the company. That's how my accountant set me up and it seems to work well.

 Sorry Tim I should have answered your question and posted the screen shots by quoting! My answer (and other screenshots are in the thread). 

Here's the screen shot of the journal entry when I put the house on the ledger.

That is correct. I do not break them down into categories, however I explain what work was done in the memo line so if I want to know later I can print the report and add to an Excel spreadsheet.

Attached are screenshots of a sold property. There are 2 journal entries for this. I also included the P&L so you can see how it looks once I take the house off the books.

Do you have a fix and flip you're currently work on that you need help with?

Or are you just getting started in the business?

It will get wiped out at the sale. All souls are cleansed (unless it's an IRS tax lien or state tax judgment).

I highly recommend you have a title company pull a title report to make sure there are no other issues (if you haven't done so already). Any knowledgable title rep can tell you what to look out for so you can bid accordingly.

Good luck Joseph!

@Paul Hansen is correct. I've fixed and flipped hundreds of houses in Arizona. Unless you're adding on to an existing structure you don't need a GC, and in most cases permits are not required.

I have a project manager run my flips, and pay a GC a fee if we need a permit pulled for an addition or teardown.

Last week I started a total gut job on a house in Chandler, including removing a wall between the family room and kitchen. My rough/finish carpenter is doing the work and no permit was required.

My partner in WI attended a few auctions in Racine County. He thinks it's controlled by the Russian mob out of Chicago :)

A lot of odd stuff happens at these auctions, it's definitely not a place to be if you're a novice.

Contact title companies in your area. Tell them you're a cash buyer looking to buy properties and that you want to connect with wholesalers. The title company rep may not give you names/numbers, but they'll pass your contact info on to their top wholesaler clients. And I promise they will call you. I've found many excellent wholesalers I do business this way.

Another approach...just Google "sell my house" in your area and there will be at least 3-4 paid ads, and dozens more unpaid that will pop up. These are wholesalers looking for deals. Call them up and tell them to add you to their list.

Finally, foreclosures, specifically pre-foreclosures are 100% worth it. The last 2 deals I closed were pre-foreclosures (Arizona). I paid the seller cash at closing and took title sub-to.

Good luck Guka!

I went through a similar experience with a house in Wauwatosa, WI back in 2017. It was an old property and I hired unqualified contractors to do the work. Total nightmare.

But I saw the rehab through to the end, even though I lost 120K. It was still the least expensive option. Selling it unfinished to an investor would have net a 200K + loss.

Still, it was a valuable learning lesson and I ended up finding a new plumber, HVAC tech, painter and siding crew that bailed me out. I'm still working with all of them today. Because of their help, and the knowledge I gained, I earned the loss back (and a little extra) on the next two flips I finished.

Your situation may seem awful now, but you'll grow from it and make it up on the next one (or two or three).

Good luck Anna!