All Forum Posts by: Ryan Pyle

I used to make my places palaces. I had the same experience that you are having. If you make the place too nice it raises their expectations too high. Now I make sure my places are clean and well maintained. No upgrades. I suggest reading the Section 8 Bible. They are a bit extreme, but their methodology will certainly give you the flip side point of view about how to run your business.

I always provide a detailed list of repairs and their "contributory value" to the property. An appraiser friend of line told me to do this. It has never been questioned by an underwriter. Contributory value is the cost of the repair if an average homeowner paid to have it done. So for instance a kitchen might cost me $3,000, but the retail value of that kitchen might be $7,500. I would put $7,500. I work the numbers so the underwriter sees a net profit of $15,000 or less.

This, along with a list of suggested comps, is part of the package I always hand the appraiser as soon as he gets to the property.

Full time

Kitchen Kompact by Kraftmade. I buy them from a supply house called Famous Supply. A kitchen full of cabinets usually runs me about $1,500. That's cabinets only...does not include countertops, fixtures, sink, etc.

If you're talking just straight fix and flips for yourself, as opposed to what J Scott is doing, I think the hardest part would be finding 100 good deals a year. You would either have to be in a large market or venture into multiple markets. I don't think I could find 100 good deals a year in Toledo. Also, your margins would most likely get very thin because of added staff and other overhead and the constant need to keep the deals flowing. I know I've bought some poor deals in the past simply because I had dead money that I needed to put to work. That's the problem with shooting for a certain number that isn't profit-related. Volume does not always equal profit.

I buy most of my inventory in Oct, Nov and Dec. Like J Scott said, there just doesn't seem to be much competition then. On the sell side of things I never really expect to sell much in the winter. However, every year for the last 8 years I've had a sale close in January. Go figure.

I've had this happen often and I always get a discount out of it. I make the argument that if i don't close then they are going to have to put it back on the market and the next guy is going to want the same discount that I do. The seller's agent most likely does a decent volume of Fannie properties and is used to this ahppening and knows how to approach the seller.

Update...buyer called and agreed to proceed without agents. Crisis averted.

Here's one for ya...last night I got a call at 7:30 pm. A woman saw my house on craigslist and drove over to see it. While at the house she called me and asked if she could see the inside. I said sure and drove over (at 8:00 on Friday night). She loved the house, but told me she was having trouble getting qualified because her credit score was only 610. I told her Wells Fargo can get her done. She called my guy over there. He got her qualified today. I called her to tell her the good news, at which time she thanked me and said her real estate agent would be submitting an offer to mine. What!?? SHE found the house through MY advertising. I got her qualified for a mortgage. And now the real estate agents get a commission!? BTW...mine was in Columbus at the Ohio State football game through all this. Weeeeeee!!!!! It's fun to be a Realtor!

In the end I guess I'm the fool. I should have just gone to the football game because I'm sure her agent would have eventually answered the phone and called my agent and left her a voicemail so she could eventually call him back and set up a showing. Oh wait....that wouldn't have happened because her agent didn't think she qualified for financing!!!!

Wow, I'm shocked at these answers. How many rehabs do you guys do a year? I do about 12 (including a 15 unit apartment building and a 5 unit building in the last year) and don't have a project manager. I don't even know how I'd keep one busy. I barely spend any time at all on rehab...maybe an hour or so a week...mostly just showing my face at the job site. With that said, I have 2 excellent crews that have been with me for a long time. We do the exact same rehab to each house, so there are no major decisions to be made. My contractors are on all my accounts so I don't have to deal with materials. My contractors are licensed GC's. They sub out any major electrical, plumbing and HVAC work to licensed tradesmen that we always work with. They all give us "investor pricing" because of the repeat business and immediate payment.

Now with all that said I'm sure that a good PM could probably save me a few thousand per deal in rehab costs, so he'd at least pay for himself.

My only employee is a maintenance man that I pay $400/week. He does all the maintenance and repairs on my rental units (up to 62 units now). He also does the mowing and snow clearing at my flips.