All Forum Posts by: Ty Burns

I always use private money lenders for my rehab projects. I normally get them to cover the purchase price and then I cover the rehab expense out of pocket. If you do not have enough capital to cover the rehab, look into gap funding. Some lenders will take 2nd position lien on a property and cover the rehab expense.

Nice. Most profit I have seen from a wholesale deal is 80k.

I am 24 and have numerous flips under my belt. Mostly high end. I do not have any rentals as of yet. Unless you have cash to acquire one, you need to get a loan. That might be hard in your case since you have no record of employment for the past two years.

Just make sure your numbers work. Doesn't matter if you are purchasing from a wholesaler or the owner of the property. Make sure to do your own due diligence. I have met plenty of wholesalers whose rehab estimates were off by tens of thousands of dollars.

Rob K-I am not too familiar with the RRP rules. This is what was told to us by the inspector. I am not sure what the cost of the test was. It was worked into our bid with the GC. It is a new law that was put into effect a couple years ago.

Michael Sherwood- I definitely learned my lesson and will be getting a lead test every time I intend to do demo work.

I have a flip going on right now in a high end area of Salt Lake City. We just started the demo work about a week ago. We wanted to get the project going right away, so we decided to start the demo work before we had an inspection. This was a bad idea. Our GC called us this past weekend and let us know that he had scheduled an inspection and that we were liable for a 100k fine and our rehab getting shut down. Apparently, any house that is built before 1978, you have to get a lead based paint test before you start any demoing of walls. This was news to me and my contractor as well. Thankfully, we tested negative. He said that every piece of sheetrock that was demoed had to be wrapped in plastic before it could be discarded. We had already filled up two dumpsters! Our GC could have lost his license and being that our house is located near a school, every parent that has a child in the vicinity could have sued us! Just wanted to share this experience and hopefully you guys can learn from my mistake. I sure did!

Maybe try using a different formula to determine your offer price. The 65% rule just doesnt cut it anymore. I take the ARV and multiply it by .94(this covers closing costs, commissions, and a little bit extra) then subtract your rehab costs and holding costs, and profit, and you have a more competitive offer. I was using the 65% rule before I applied the above formula and I would say 50% more offers of mine are getting accepted.

The first step would be to assemble your "power" team(if you have not done so yet). This can consist of many different people, but you can get by with just a realtor that is willing to pull comps for you to determine the ARV of a potential property. If you plan on rehabbing the property, I suggest you have a general contractor(s) that you can call to give you some bids.
Once you have your team assembled, you can start looking for some distressed sellers. When you find a potential deal, I recommend having your realtor pull some comps on the property to determine the ARV before you perform your due diligence. By doing this, you will have a number to work off of when looking at the amount of repairs needed. Talk with the seller and assess their situation. Find out why they are selling. Let them know that you plan on fixing up the property and selling it for a profit. Its best to be honest with the seller. If you have a good idea of what the costs of repairs are going to be, then you can run your numbers and if the margins are there to make a profit, you can present an offer to the seller. Otherwise, get your contractor in there to give you a bid.
Hopefully the offer price you presented to the seller will work for them and you can get a contract signed and have the house under contract!

I am a local investor in Salt lake. There is much more inventory for SFH with mother in law apartments than there are duplexes. I think your best bet would be to look for some SFH with a mother in law.