All Forum Posts by: Rejean Julien

Couple things

Firstly a well know flipper, J Scott wrote a book on this very thing. I rehabbed and flipped 45 SFH's last year i can tell you this book is pretty comprehensive.

http://www.amazon.com/Book-Estimating-Rehab-Costs-BiggerPockets/dp/0988973715

Firstly you should start with the material. What is the material costs. There are so many different types of material and each has a different application in each real estate market. I would suggest analyzing the comparables and copying which designs you feel are effective to get a sale.

Then you can get the labor cost from a contractor or trade. They typically dont like to give out this info but they can be persuaded.

add them together :)

By the amount of money a person is willing to pay for it :)

Regarding your renovation costs its possible to get it done for 12-15k but you would need to keep your fixtures and materials basic home depot quality. You wouldn't be able to use nice granite, cabinets or tile etc....

What year is the building?

Are you saying you are going to keep the floors and just refinish or are you planning on ripping them out and replacing them? Are you including appliances, what about doors and trim?

Furnaces can be a pain as they often face one direction so moving just the door isnt always feasible.

You never mentioned real estate commissions or closing costs. Often there are other small costs that you might want to include as they can really eat into your profits on a smaller deal; things like home warranty, utilities or the final buyers repair/request list.

Assuming an ARV of 90K, i wouldnt offer more than 55,000 as there are usually mistakes and unexpected costs early on in an investors career. Ideally if you could get the property for less than 50,000 then you should be safe. That being said you are unleveraged so your ROI is a bit low.

I would suggest getting multiple agents to give you an ARV and pay close attention to the days on market for each. In areas like you are describing properties can sit on the market for some time before the right buyer comes along.

I would also say scrap the 70% rule. Its much better to be fully aware of all the costs associated with this deal and make an informed decision. Lay everything out on an excel spread sheet and play with the numbers. Your real estate agent should be able to help you with closing costs, commissions and any other costs associated with the sale and your contractor with the rehab costs. The more time you spend thoroughly analyzing the details and building systems of analysis in the beginning, the easier it will be the next time.

just my thoughts, pm me if you need any more help

Hey Guys,

We have been house flippers in Phoenix for the past three years and are now expanding our operations to Tucson AZ with a complex of townhouses.

I was wondering if any investors out there from Tucson could recommend a few competent and cost effective general contractors. The remodels are mostly cosmetic (paint, flooring, cabs and tops) with some electrical/plumbing.

I appreciate whatever assistance anyone can provide.

Thanks

Ray

Thats easy ... knowledge.
Look at how many real estate moguls have gone bankrupt only to recover two years later.
Just last month I sold property that required 0 of my own cash. Obviously there were minor expenses such as legal transportation etc. but otherwise it was all built into the deal.
Buy: 203,000
Hard money: 165,000
Private Investor: 75,000 (15% secured + 10% of profit)
Reno's: 25,000
Sold: 265,000
Net Profit: 14,600
4 months from close to close.

Now if private money was more accessible and the trust easier to build you could do alot of these and, in theory, spend none of you own money.

I would rather be the most experience and knowledgeable person in the room but i would settle for the smartest. The key is to keep your mouth shut, no one else in the room needs to know everything you are thinking at all times.

Regarding how much knowledge one needs before they start a wise man once told me:

"If you waited til all the lights were green before you drove to your destination you would never leave the house."

I know quite a few successful people who started a business with a lot less experience than they probably need but still managed to succeed. An expert is someone who has made every mistake possible .... so you have to start somewhere. Truly i think it is your persistence and ability to learn that will pull you through the tough times. You might have to stop at a lot of red lights, but eventually you will get there and be the better for it.

Of course this advice changes if you are playing with someone else's money ...