All Forum Posts by: Stephen Chatto

@Ricardo Acevedo

 It would be of NO Value.   Are they putting in tile or vinyl?  Are the putting in granite or solid surface?  Are the repairing or Replacing Windows?  Are the Repairing or replacing the roof?   Are the changing the heat from Oil to Gas or leaving it?  Are the putting in central air or not?   Are they going to put new siding or just paint the house?  Are they going to remove that wall to open up the floor plan or leave it?   

There are too many variables in a quote...    And even with the same exact quotes.   3 contractors will give you 3 different prices.   

What if you get a quote at 30k...   Your buyer buys the deal and it cost him 45k.   Now he is not making any money.   Think he is going to trust you going forward? Maybe or Maybe not.  

Don't waste your time.   

Remember Dragnet?  "Just the Facts"

Bathroom was remodeled in 1995
Kitchen was remodeled in 2005
Roof was replaced in 2007
Heater is from 1976

Let your buyers run their number.  One is gutting the bathroom another is just putting in a new floor and throne.  

@Devan Mcclish - I need to respectfully disagree about the MAO Formula. I have debunked that rule on many occasions. ARV and Repairs are both subjective. Stick them into a formula to get a Max Allowable offer. That makes no sense. You need to know your market. You need to know your Buyers. I just recently got a deal over the competition because my offer was based on logic and knowledge not a formula. My offer was 185k My competition came in at 135k-165k. Who do you think got the deal?

Yes the deal is sold to an end use cash buyer and we are doing well on it.  

Real Estate Myths. I am glad my Mentor @Karl Krentzel is willing to tell me the truth so I can get deals DONE.  Her are a few myths he helped me DEBUNK

1) Myth #1 Realtors mess up deals and are a waste of time.

False - Karl has always encouraged me to work with Realtors. I am working with one now on a deal and she has been great. She found my ad on craigslist, called me up, listened to what I have to say and brought me a buyer. Now that She's involved she is keeping everything moving forward quickly and efficiently.

Extra Credit Question: Who do you think was using a higher ARV. The Buyer with the Realtor who gets to list the house after rehab or the average fix and flip investor?

2) Myth #2 - MAO = ARV *0.65 - Repairs . What a joke. I love this formula because it helps me be competitive in my market. My competition used that formula on this deal and his offer price was 50k less than mine. Plus to top it off. ARV and Repairs is completely made up. Your taking two numbers that are completely arbitrary and up to massive interpretation and then popping them in a formula to determine your offer price. COME ON. At the end of the day you need to know your market to learn where the prices should be.

3) Myth #3 - State contracts are stupid. Wow, I have learned the hard way that things run so much smother if on a state contract. As a wholesaler you are selling CONTRACT not houses. So it is fair to say that a better contract is worth more. We determined above that realtors can bring buyers. Strong buyers in fact. Do you think it is easier to sell that buyer with a Realtor a State Contract or a 2 Pager? Use a state contract and your buyer pool opens up tremendously.

4) Myth #4 - You need to know how much the repairs are, and the ARV so you can advertise your deal. What a joke. You think buyers agree with your repair cost estimates and ARV? Why waste your time. When advertising this deal I didn't include either. Here is the property. Here is What I know, Here is my Asking price. Don't think for your buyer.

I can think of multiple examples in my business when these 4 myths have been debunked. It feels good to know the truth

Hope some of you can benefit from this insight.

BREATH.

Remember you are not selling houses.  You are selling contracts.   

Why would you morally feel like you need to get contractor's quote on repairs.   That's completely subjective based on what the buyer wants to repair.

What does the fact your wholesaling it have to do with the earnest money?  Negotiate it as low as you can.  

Why would you Double Close?  Just assign the deal.  

And because it is so important, I need to remind you.   You are not selling a house.   You are selling a contract.   You are not getting a fee to put a buyer and seller together (Unless you are a Realtor)

Glad I could Help!

@K.D Neider - Cool..   Bill is a good man!  We have stuff all the time!   Our next meetup is Wednesday in Trenton, NJ  

We meet the First Wednesday of each month.

@Todd Long - Nice to meet you.   I also invest in Mercer County NJ.   @Matt Faircloth is a good man and a good resource.   The SJI Mercer County Meeting every month is Awesome.   In February 73 People showed up!  It was awesome.  I also host a Investors meetup in Trenton the 1st Wednesday of each month.   Reach out to me if you want details.   I wholesale deals also..  so can let you know what deals we have available when your ready.  

Happy investing!

-Steve 

Call Ron Isgate 215-396-1020

http://www.isgatelaw.com/attorneys/ronald-c-isgate/

He is a GREAT Attorney

Take a guess..  Really..  I mean do your best.   Get it under contract.  Then do your inspections.   You can have one contractor tell you 20k  and another 50k.   We are flipping a deal now...  On guy wants to put 40k into it... another 70k, and the last 120k.  Assume a little high.   During your inspection period have your contractors bid the job, and then go from there.  

That's why you have an inspection period.