All Forum Posts by: Richard Betz

Certainly not specifically, but whether you can make money on the deal hinges on your rehab costs. The Report doesn't really give me much info on the property so my analysis is limited. But the ARV is limited by the market. Your rehab costs are somewhat variable, by adjusting the quality and depth of the renovation work. But certainly there is a minimum level of repairs that must be done. Doing them poorly can hurt value. Doing them at too high of a standard is simply a waste of money.

A project needing a lot of work can be a great bargain, if you can get the work done quickly and at a good price.  

Looks like a lot of rehab is needed.... 

First establish how much you have to pay the sister who wants to be cashed out.

You may be able to get an equity line against the house from a local lender.  Or borrow against your own home to come up with your half of the cash needed to pay her.  

Then again, it is two against one!  Tell her no, and just keep sending her the monthly check.    She could force the issue with a lawsuit, but would she? 

Refinancing may be your only option then.   Maybe take out a bit extra money and use that for your own needs too.  Even if you took out 50% of the value  the loan payment would probably not be that much and the house should still cash flow enough to make the payment and still some extra every month for you two. 

See if he will carry it.  I don't know what fancy term they use now, but we used to call this a wrap.  

Basically you take over the payments.  You do the rehab, and get tenants and rents coming in.  Then refi the place to pay him off.  If there's any equity you can't refinance out, make payments to him to cover that.  

Barely any cash out of our pocket, he gets immediate relief from the debt and will get money coming in for a while until you pay him off.

That is indeed outrageous.  I am a contractor and I used to install windows for Home Depot.  They paid about $50 a window to install.  You had to be quick to make it worth it.    

Retrofit windows from Milgard or Jeld Wen are usually only a few hundred each, and made to fit the existing window frame that you have.  Using retrofits keeps you from having to restucco, or mess with the siding or framing.  I am assuming vinyl sliders.  If you are using wood or vinyl clad or casement style then the cost would be more. 

Installation typically is $200 each to put them in.  Big windows or slider patio doors are a bit more.  But 8 windows should run about $4000.  that would include sundries like caulking and tape.  Haul away included too.

We tried recycling the old aluminum from window frames but the price of scrap aluminum isn't worth the effort.

If you want to go low tech, I would say to break out a section of the concrete there and see if anything is under it.

Rent a demo hammer and mack a decent sized hole.  If there is something seeping up you'll know.  If it is a pipe, you'd probably have to break out there anyway.  If it turns out that it really is just something on the concrete rather than under it, patching the concrete will solve that issue too. 

The hardest part of flipping in Southern California is finding decently priced homes.  There's so much competition that is willing to overpay for homes right now.  

A product that works well to prevent moisture penetration is Xypex Concentrate.  It is applied onto damp concrete or block.  It creates crystals inside the capillaries in the concrete.  Truly an amazing product.  It can be stucco-ed over or textured.  I have used it inside and out, below grade and above.   Keeping moisture away from the exterior walls and the foundation is key. 

When you say "full gut"  what does that mean?  I assume that means all drywall was taken off and the home stripped to the studs.

If that is the case, then you should have pulled a permit.  The inspectors want to see that enough nails or screws were used when hanging the new drywall.  If you did strip down to the studs did you redo all the wiring?  Inspector would want to see that too.  Did you do new copper and DWV piping?  Again, inspector would want to see that.

I am a General Contractor ( and RE Broker)  and have been through this experience many times with customers.  The inspector may ask you to open up a few sample walls to check inside for proper work practices.  

Did you do a new shower?  He will probably want to wet test the pan.  ARe GFCI outlets in the right places? AFCI protection in the bedrooms?  

He will come in and do his checklist.  In all likelihood it won't be that bad.  Cooperate, plead ignorance and do what they ask.

And let us know how it goes. 

Hard to give up the profits to someone who just supplied the loan.  I compare what a loan would cost me, and offer that to the investor, with a little bit of the profit.  So if your lender is 2 points and 10 percent, go with that as their end, plus 10% of the net at the end.