All Forum Posts by: Craig P.

Denver is really strong right now. We have the lowest active inventory right now since 1999.
Average DOM is 105 vs 121 in 2011 (13% decrease)
Sales volume is up 14% in Feb 12 vs Feb 11
Sales units are also up 14% Feb 12 vs Feb 11.

Good time to be a rehabber. Our rehabbed properties are going under contract in about 30 days right now, which is much better than the average in Denver.

Rent market is strong as well. I have a property that I charged $1650 for in early 11, and I had 3 people fighting for it at $1950 this year.

George, I disagree.  I have written many offers with $10-20k em whereby I beat out higher offers.  Obviously nothing is guaranteed; however the stronger you look the higher % chance you will get it.

REOs are good for singles, doubles. The numbers will most likely never be better than 75% purchase + rehab of ARV with REO deals. We buy them to keep our crews busy while we find the triples, and home runs off market.

Gary,

We spend a fair amount each month on marketing. Approx $5k per month however that $5k translates into 3 or so really deep off market deals each month. Direct mail, & PPC are our primary strategies. You have to spend money to make money in this business.

We do sub to all the time. They are easily negotiated with private sellers via off market opps. There are many disclosures, POAs, etc you want to have signed, etc to protect yourself and make sure the seller knows exactly what is happening. Also, if you do Sub to, don't forget to change the address with the note holder as when you close it out typically you will get a refund for money held in escrow. You'll want to have a plan B if the call the note due; however this has never happened to us.

I would start with a structural engineer not a foundation repair company. The structural engineer will either provide a letter stating it is sound and doesn't need repairs or provide a scope of work of what specifically needs fixed. You should be able to do this for around $300-400. If the report calls out necessary repairs to shore up the foundation, you will have no choice but to fix it, and then have the engineer provide a letter after the repairs.

If you discover there are repairs needed you will have no choice but to disclose this to the new buyer or any other buyer that comes along.

Good luck.

If you are working with a private seller in many cases you can also negotiate the deal as "subject to". We do this quite often...I bought 4-5 like this last year. It is very, very cheap to carry properties like this...

The key with "subject to" is to be very upfront about your intent. We have our sellers sign a specific disclosure document that calls our this intent and how the subject to works.

As far as hard money....it varies. Here the HM market typically is 2.5-5% Ori & 12-16% Interest. I typically pay around 2.5-3% & 12% interest.

Your best bet is to raise private funds. Go work your network of people and find some folks looking for conservative returns. This is the cheapest money. In these scenarios we pay private folks about 1%-2% & 8-10%.

Hey Matt,

Condos & Town-homes are much, much tougher to wholesale than SFR properties. Most investors will shy away from them, but I am sure you will find a few peopled who will buy if the numbers are solid. I personally wholesaled a few last year, and rehabbed and flipped a few.

Your numbers will have to be extremely solid. Look at what bank-owned ones are selling for in the same complex/area and how quick those are moving. You need to be below those prices by a considerable margin.

If you are negotiating with a private seller I would try to work it on an option agreement because of the uncertainty of being able to find the b-side buyer. I am very upfront and specific about my intent using the option contract.

"Mr seller, I will do my absolute best to move your condo/town-home, but please know there is a 50/50 chance of it working out. I will know for sure in 1-2 weeks of my marketing efforts. My plan to sell your unit is to work with one of my investor partners I have in town. I will make money on the difference between what we agree on, and what i sell it for to one of my investor partners. Worst case Mr. Seller is we spend 1-2 weeks at this and it doesn't work. If that happens we can re-look at our strategy."

Your buyer list needs to be a good one. I wouldn't bother unless you have a solid list of buyers.

Good luck.

Armando, PM me and I'll get you an excel list I have been using. Lets trade keywords. I have been running a PPC campaign for about 12 months now.

Hello all. I am looking to try and cut my material costs further this year by leveraging on-line materials. Curious who else is buying materials on-line and potentially in bulk to save on construction costs. If so could you offer suggestions on who has the best deals on?

-Plumbing fixtures
-Shower valves
-Kitchen and bath faucets
-Doorknobs/hinges
-Kitchen cabinet hardware
-Lighting
-Anything else?

To start us off I have been buying doorknobs/locks at:
http://ebuilderdirect.com/

Thanks everyone for the candid feedback. Based upon everyone's comments I think $100 is more in line and what I will target.

Keep in mind everyone's market is different and what you can buy and build for in MS, TX & FL is not the same here. This is an in-fill development as such there are other costs you may not be factoring such as the cost to scrape the existing home, etc.

If I can achieve $100 per foot, my investment will work and will generate a nice return. I'll let you all know how it pans out.

Happy investing.

Thanks Steve. I appreciate the insight. I have been overly cautious/conservative on my build costs.

Bryan,

Yes we have capital; however I have about 8 rehabs going right now so my liquidity depends upon what I am holding at that exact moment in time.

thanks Bryan. To sell at full value we need to use higher end finishes. IE Custom cabinets, granite, etc.

Good news on financing is I have arrangements with a private lender who has very deep pockets. No capital costs. Just have to give him 25% of the profit.