All Forum Posts by: Michael Hicks

@Adrian Chu, I've done 5 since July and my goal is 10 this calendar year.  

@Christian U. every property I've purchased has been off of the MLS. Things are fairly competitive here but I tend to go toward properties that scare others away. This one-way missing the HVAC unit and dome of the wiring and plumbing had been ripped out. I buy up units off of Craigslist when I find them. Usually around $200-$300 bucks. By the style of house I could tell that 90% of the wiring and plumbing were intact. Most people run from these. They're my favorites. Usually deeply discounted.

 Something must be wrong with the site.  I tried several times to upload the afters but it's not working for some reason.  I'll get them on asap.  Thanks

Ok, so we finished up last week and got it on the market 3/14 and I accepted an offer that evening.  Materials ran a little higher than planned.  The numbers ended up more like this.  

3 Bedroom, 2 Bath approximately 1450 sq ft on 3/4 acre lot

Purchase Price $27,503

Estimated Contract Labor $10,000

Materials Estimate $9,976

Total In $47,479

Repair time 3 weeks

Interest Payments for 2 months $1,000

Contract Price $83,900

Closing Costs $4,400

Realtor 5.5% = $4,614

Net Due to Seller $74,886

Minus Investment and Carrying Costs of $48,479

Profit $26,407

I had a great time, met some great people,  and learned a lot about Home Depot and what they have to offer.  Great event.  Thanks@Andrew Cordle for getting this put together.   

When I was building, I built on a cost plus basis.  Cost plus 20% (10% profit and 10% overhead) or cost plus a flat fee.  My largest custom was $160,000 and it was cost plus $30,000.  This was 13 years ago.  If you are working with a builder who is more or less building a spec home I would expect to less than if you were a picky customer who will be going in and changing your mind every other day and slowing down progress lol.  Most builders will charge for change work orders.  Good luck.

Are you in a city or county that has codes enforcement?  A few anonymous phone calls could get the yards cleaned up or the occupants cited to court.  It works here but might not in other areas without codes enforcement.  

I was thinking the same thing. That is the price range I shoot for. All in at 50-60k with ARV of 75-100k. I flip but that is a great way to build a portfolio. Good equity and $50,000 on hand is a good position to have.

Both deserve merit.  I agree that a % of something is better than a % of nothing.  When someone says " you give them half of the profit?"  My reply is " 50% of nothing is nothing."  I'd rather half 50% than not get the deal.  However, some of my flips only net $20,000.  I'm not going to do all of the legwork for $5,000.  In the scenario that was presented above, he was referring to net cash flow from rents which is different than net of a flip.  I would want 50% equity in the property.  As far as the rents are concerned, I would figure in property management as part of the costs and either pay yourself or an outside management company.  Then figure out how the 2 of you want to split the remainder after expenses.

Great advice.   Georgia works the same way.  If someone moves in with your tenant with or without your permission or adding to the lease, they have the same rights as your tenant.  You will have to have them evicted if they will not go on their own.  Check with your lawyer.