All Forum Posts by: Account Closed

@Sam Shueh Definitely forgot to budget in Landscape, the properties that I'm looking into shouldn't need too much so I figure I may add 2-4% of ARV to cover that. Plumbing, Structure, Fungus etc. should all be accounted for in my GC Bid. Please be advised that the numbers above are mock and not an actual property. I'm looking to get a good feel for the numbers in the items to include on my analysis. I disagree on the Interior design costs you suggested, I would definitely not spend nothing near $100 per square foot on the whole project, lets not even talk about just the interior!!! Margins are a bit tight on my side.

@Brian Pulaski I increased those preset numbers to those below. They seem to be more appropriate. You mentioned not using those at all, keep in mind that I add about 15000 in permit, miscellaneous and materials and another 15000 for a safety net and I require 25% return on my flips. Which gives me a good spread. I think they allow me a way to get my pre-analysis work done quickly before my due diligence period.

Lip Stick	$ 28.00
Lip Stick Advanced	$ 35.00
Standard	$ 42.00
Vandalized	$ 48.00
Big Gut Out	$ 52.00

@Maggie H. I think I should definitely stick to some cosmetics or advanced cosmetics at the most for my first couple of deals to be able to get done with the rehabbing process quickly as it's becoming apparent to me that that can be a major set back for me from a Project Management stand point especially with it being my first time. Going to get in touch with realtors to see if I can find a property meeting this criteria in a good market. Thanks for your help!

@Sean Ridlon I definitely budgeted for GC Quotes lol I figure this would show how serious I am and also be a good way to attract reputable contractors who aren't in the business of wasting time. I want to be in charge of purchasing materials, so I'll need to do some research on other specialty stores rather than sourcing everything through Home Depot and Lowe's.Next Challenge I Guess. I'm thinking checking out prices of the materials used in comps in my areas may help me in putting together an abstract Scope of Work. Thanks for the input!!

Hi @Maggie.H, Just want to thank you again for answering my questions. It actually helped me tons. I’m in the process of learning more on rehab and construction components and trying to get a good example of a good comprehensive GC Bid Form. Do you suggest I look for interior designers, my only concern is that I would want something that is appropriate to the market to not risk over/under rehabbing anything. Lastly in terms of not looking for anything too drastic, what would you consider as a good type of flip to get into. My market is a bit expensive so, I’m a bit drawn to the bigger rehab projects to actually get a good spread. Pierre

Thanks for the information, that definitely helps. I’m with Brian as well, would you be able to show what a good Bid Form looks like. And if you can comment on how to get a good designer on your team who understands what designs works for what market based on comps? Thanks again.

Hi BP,

Looking to gain some knowledge of rehab and construction. I ordered J Scott's book on Estimating Rehab and hope to get some good nuggets there. 

But I wanted to get some advice from current flippers, especially those in expensive areas such as Jersey and NY. Terms like Framing, Trim, Wiring etc are foreign to me. 

When GC does a bid, does he include Materials or should I be in charge of buying that on a request basis. Heard that some of them can rip you off on that end. Like buy more than they actually need and keep the rest! 

What are some general rehab and construction pieces you feel a good flipper should know? 

Where are the best places to find material?(BIG BOX Stores or Specific Department Stores) 

Do you know already what materials you plan on using and how much of it you will use even before you close on the property? (As that can depend on the markets you're operating in)

Also can an Agent help with Design of Home to make appealing to prospective buyer or Should I seek an Architect or Interior Designer?

Thank You for answering this bombardment of questions!

@J Scott Will definitely put that into practice, thank you for the input. You sir are a LEGEND! your book on flipping was one of the first I've read which made me want to get into house flipping as means to kick start my RE career. Thank you for all  that you do!

@Maggie H. That is awesome advice. Could definitely reach out to some of the people from meet ups I've gone to. Do you think that property radar is the best to get owner and seller info? That is actually one of the battles I'm facing. I have a list with hundreds of properties that are just addresses and I'm not too keen on the door knocking thing. And I wasn't sure that I had enough to do a mail campaign. 

And also how did you find a good contractor to work with?

Thanks for your time!

Yeah that is one of my major concerns. I read the book called flipping blueprint which provided me with these presets but it bugged me as I know a new roof installment can go for 15k alone in my area. Just to be clear, I'm not a wholesaler. 

Trying to figure out how to do analysis with good numbers and inputs. Sorry you don't understand the worksheet, It isn't merging well with the platform. I'd be glad to have you take a look at it on excel if you wouldn't mind.

I hesitate to up the presets to high, as I include materials, safety net, miscellaneous and appliances separately.

Thanks for the input!

Hi everyone

I'm doing some pre analysis on some houses and it seems to me things are a bit expensive especially in terms of materials and labor. I'm in the NJ market so that is to be expected.

I'm struggling with analysis mainly in trusting my numbers and actually finding numbers that work for me

-I've built in an safety net into my budget but don't know that it's enough

-I've assume some steep borrowing costs for myself being a newbie and not having a high income (5pts upfront and 15% interest lol)

-I'm struggling with picking the right number for a remodel. (I typically chose about $24-$34 per sq ft)

-MOST IMPORTANTLY - trusting comps that I'm pulling. I typically go on RedFin or Zillow but being that I've never done this before, I 'want to compare apples to oranges.

I've driven for dollars and have built a list of some potential addresses but now I need to figure out which one is a deal and which isn't. Should I be seeking to contact these people through the phone to see if they're interested in selling their home to an investor? Should I be sending letters? Should I contact a realtor? or Should I do the analysis first ?

Here is the data copied from excel that I use to do some of my analyses. If any experience flipper can share some knowledge and wisdom on the process, I would truly appreciate it. I can send the actual excel file through email if you want to see my calculations and assumptions.

Purchase Price	$ 166,083.31	Year Built	1910
Realtor or Finders Fee	$ -			Lot Sq Footage	0
Total	$ 166,083.31			Sq Footage	1684
			Yearly Tax	$ 10,000.00
Amount to be Borrowed	$ 228,440.32			Bedrooms	3
Personal Cash Invested	$ 35,216.66			Bathrooms	2
Pre-Inspections				Lip Stick	$ 18.00
GC Quotes	$ 700.00			Lip Stick Advanced	$ 24.00
Lining	$ 700.00			Standard	$ 28.00
Inspection	$ 600.00			Vandalized	$ 32.00
Total	$ 2,000.00			Big Gut Out	$ 36.00
Cost of Money			Remodel Type	Standard
Points (assuming 5pts)	$ 10,000.00
Broker Fee	$ 2,000.00
6 months Interest	$ 17,133.02
Lender’s Lawyer	$ 1,300.00
Total	$ 30,433.02
Closing at Purchase	Potentially covered in points payment
PurchaseTax	$ 3,321.67	I assume 2%
Title Work	$ 1,000.00
Total	$ 4,321.67
Construction Costs
GC	$ 47,152.00	I multiply sq footage of house by preset number
Materials	$ 10,000.00	Total Guess
Misc (Permits, etc)	$ 5,000.00	Guess
Appliances	$ 6,000.00	Guess
Safety Net	$ 15,000.00	is this enough or too much?
Total	$ 83,152.00
Holding Cost
6 month Property Tax	$ 5,000.00
6 months Utilities	$ 600.00	I assume $100 per month
Commercial Insurance	$ 2,500.00	Is this needed?
Total	$ 8,100.00
Closing Cost at Sale
Tax	$ 500.00
Title	$ 1,100.00
Warranty	$ 500.00
Realtor Fee	$ 19,750.00
Total	$ 21,850.00
Total Costs	$ 315,940.00
ARV	$ 395,000.00
Net Profit before Tax	$ 79,060.00
Net Profit after Tax	$ 51,389.00	Asumming 35% Capital GainsTax
Minimum Required Return	25%
Actual Return	25.0%

Hi Jason, 

I'm also in a similar situation as you but you said it yourself, WHO do you know that has money to invest. Start there! 

Reach out to Investors here and on Instagram and buy them lunch and pick their brains. Show them some of the properties you are looking at and show them some of the analysis you do. If you get one under contract see if you can partner with them or even wholesale the deal cheaply to be able to go through the process with them and build experience and some capital along the way. This is the strategy I'm going with at the moment.

Your Net Worth is in your Network. Attend Meetups and surround yourself with like minded people instead of just being in front of the computer all day soaking up repetitive info.

Hope that Helps,

Pierre

file:///C:/Users/pierr/Documents/House%20Flip%20Calculator.pdf