All Forum Posts by: Valerie Hiscoe

Maybe you could offer $185k with vendor financing with payments not starting for 6 months. They (family will want to control the decision) would make an extra $10,000, you wouldn't have to qualify for a $185k mortgage, you might be ready to sell before your first payment is due, and although you'll pay her more for her house (benefitting her), you'll make $55,000 instead of $39k. And you'll hold the title which would make me more comfortable.

I'd find a real estate club or try through this site to find a lawyer who specializes in investment real estate and not do anything without their blessing. Before you spend the money on the consult, run it by the neighbours to see if they are willing to sell to you if you could pay $10k more but they wouldnt receive the money until later.

Ask @Shaun Weakes

Hi @Kathryn Bowden

I think the @name thing always works but if I do it on my phone, it doesn't turn blue.  Weird.  Unless it didn't work here and then you'll know.  Lol.

Reason I'm writing though is: I'd try really hard to do BRRRR. It sounds like a very good property with huge future potential. Run your numbers through the BRRRR calculator and, as @Brandon Turner says, don't say "We can't" say "How can we?". Do what you can to ensure that selling is not a decision you'll regret.

Counter and sink sound awesome BTW!

Hi Felipe

I'm not sure of the answer to this question so I'd go to the 'Tax, Legal Issues, etc' forum and post the question there.  I'd also recommend changing the title of the post so that it gives a better idea of the idea of the question, say, "Is free labour tax deductible?', something like that.  Hope that helps!

Hi Matt

I'm just going to assume that you weren't sure of the listing price because real estate prices are in crazy fluctuation right now - for the most part going up!

But I really wrote to say was how amazing a transformation you pulled off here.  You took something that very few could probably see the value in and turned it back into somebody's home.  That takes guts and vision, (and usually some blood,  sweat, and tears).  Congrats!!

My original comment about needing to know your target market before commenting on the rehab was about the finishes you chose. Things like stainless steel appliances, kitchen islands,... stuff like that is almost a prerequisite in certain markets and it's mid-income not just high end where they're expected.  I hope that it's not the case in the market you're presently pursuing but, seeing as you have a HUGE window for success in this flip, you'll probably be repeating the process, and it's somethingto keep in mind.

Again, congratulations and best of luck.

Hi Kathryn,

As you stated, budget will always be the driving factor behind the extent of your renovations.  That being said, you'll need to prioritize the work you'll be doing and make use of the comps in your area to thoroughly understand your target market in order to do so.  Will this be a principal residence? A summer home? A vacation rental? You're best off aiming to appeal to as wide a market as possible while still focusing on the most likely buyers.

The description 'beach cottage' implies that it's a somewhat quaint abode with a location that would make it suitable as a vacation rental.  If that's an accurate description, then the very quaintness of the property will be an integral part of the appeal, and is what lends it it's authenticity.  If your gut feeling is to use your design skills to maximize that authenticity and appeal, they are probably right.  Just be sure that a 'beach cottage' is what you're aiming for and your market will be looking for.

Assuming your instincts are accurate and you decide to capitalize on the property's charm, I think it's still important to make some changes to ensure a broad market.  I'd still aim to make the bathroom as spa-like as possible which would probably involve replacing much of what is there now.  In the kitchen, new appliances and lighting are still going to be a major factor in a purchaser's decision.  Durability would be the important factor to an investor if that's a likely possibility for your area.  Your creativity is what can set your property apart from the others, but use it to add rather than detract from it's universal appeal.

Look forward to hearing or seeing what you decide to do!

Renters with children will need a bathtub so, as you noted, the lack of a tub in the house would be a problem, minimizing your potential renters, if this is the only bathroom.

Placing the tub along the far wall and rerouting the closet to have it opening into the outer hallway instead of the bathroom, is a great option if you can find a tub that will work.  It would allow you to add a much more desirable larger vanity, as well as make everything feel less closed in.

Another solution would be to keep the tub where it is but move the plumbing so you could replace the dividing wall with glass block and give not only the illusion of a lot more space, but also allow natural light to flow and give a modern edge to the room for a fairly small investment.  The added sparkle would be a noticeable upgrade in the rental market.

When painting, you could choose the same color for both ceiling and walls to de-emphasize the sloping roof, and choose materials with very little contrast throughout the room, to again add to that illusion of space.

Absolutely anything you do to that room would be an improvement so you're lucky in that you really can't go wrong! Best of luck!

It's popular knowledge these days that it's better to work 'on' your business rather than 'in' your business, and that 'is' my end goal, but I'm going to go against the flow here a little bit and introduce a few caveats that personal experience really forces me to mention. Namely, the problem with not having a hand in renovations on your property is that people can and will take advantage of you. Especially if you're having work done from a distance.

Maybe it's coincidence that the people who have responded to your question are either contractors themselves or are very experienced with construction - but $80k plus or minus $30k, and 2 months plus or minus 6, is worth your while to spend some time on educating yourself.  I'm not talking about how to paint a wall or change a faucet, and I know you're renovating this property for a long term rental not a flip, but when you're on the brink of making such a substantial investment - from a distance - trust and references can only take you so far.  I still think it would be beneficial for you to order The Book on flipping houses and The book on estimating costs. (And there's even some kind of special deal on July 4th if you order from Bigger Pockets.) You'd learn things like the average mark-up a GC charges for his subcontractors, for example, as well as a whole lot more.

You might not need to actually 'do' any of the work on your property, but having the knowledge and confidence to check on the work being done is pretty invaluable and puts you in a position of a lot more power.

No offense to any of the GC's out there!

Hi Zoe

There are the calculators for rentals, flipping etc that you can use from Bigger Pockets too. They're under 'tools' from the menu above.

Having a friend in the business is a great asset. A lot of Realtors are not investor oriented and it would be helpful to her to learn what's needed.  It might be helpful for her to check out 'The Guide to Wholesaling',  and the 'Ultimate Beginners Guide' also from the menu.

Lots of luck and best wishes!

My understanding (mostly from learning from J Scott) is that the usual range for a GC is approximately 10% up to as high as 20% over and above the fees for the job. This includes hiring the subs, pulling the permits, overseeing the work regularly (daily ideally), being there for inspections, etc.  That's more or less the definition of a GC.  HOWEVER, that 10 or even 20% can not necessarily guarantee that this job will be his #1 priority.  It could be the smallest one he's got going. On the other hand, what if the profit ends up, for whatever reason, not covering the mark-up he would usually be charging for the job? Is he taking the risk right along with you?

Partnering with your contractor is what has given you the confidence to enter the world of flipping. He can easily make the difference between the success or failure of your project. (Believe me, i know.) Its definitely not just the difference between 10 and 20%. What's more, you don't have the intention of becoming your own contractors in the future, so that would continue to be his contribution to the partnership. The profit doesn't get divided until the fat lady sings. (Making the possibility of him not being able to finish the project a moot point as long as you cover yourself for that eventuality contractually.)

Contrary to what is sometimes believed, money can actually be one of the most easily found parts of an investment.