Throughout most of the country, prices are rising, and investors are scrambling to find deals. My market in Colorado is no different, with prices rising 20 to 40 percent over the last two years.
Investors have come back in a big way since the housing market recovered, and it is definitely harder to find deals. However, I have still been able to buy fix and flips and rental properties in a very competitive market. I have no secret ninja techniques to find deals; I simply used solid fundamentals to buy properties well below market value.
How to Estimate Rehab Costs!
Estimating rehab costs accurately can make or break your real estate business, and it takes years of experience for even the best rehabbers to master the art. However, you can expose yourself to less risk and get more accurate with your projections by learning how the pros think when estimating construction costs.
How Can I Handle 10 Flips at Once?
If you read my recent articles about contractor problems, you will see it has not been smooth having ten flips at once. However, I think I have greatly improved my business by having this many flips. I have added three contractors and started using an old contractor again who used to work with me. Having that many contractors will make my job so much easier, especially once I get caught up on all these houses. I have decided not to start my own contracting company yet, but that may be a future move.
The good news is three of my flips are on the market and under contract with closings all happening in October. I promised myself I would not buy any more flips or rentals until I sold some properties, but I just got a new one under contract yesterday! I decided it was okay to buy another since a couple of my current flips will be closed soon.
How Have I Been Able to Find Fix and Flips?
Nine of my current flips were bought off the MLS, and one was through direct marketing. There are still deals on the MLS, no matter what anyone tells you!
You have to act very fast, and in some cases be willing to do a lot of work, but the deals are there.
Here is a list of my last ten purchases and how I bought them.
My Last 10 Purchases
This one I found through direct marketing. I have been sending hundreds of letters a month to probates and absentee owners.
This was a traditional sale on MLS. The home was built in 1857 and needed a lot of work. The buyers knew it needed work and liked my cash offer enough to close in 15 days with no inspection.
There were multiple offers, and I got the home $10,000 below list. It is being repaired now and should be on the market in a week or two.
This house was a short sale built in the 1940’s on MLS. I had made an offer on it after another highest and best.
The bank approved my offer in May, and we closed in June. The house is almost ready to be listed and was bought $3,000 over list.
This house was a traditional sale owned by an investor on MLS. The owners were going to flip, but ran out of money.
I made a cash offer hours after it was listed, and they counter me and I accepted $15,000 below list. House is gutted and sitting there waiting for a contractor to free up.
This house was for sale on MLS as an REO. It was priced super low, and I made an even lower offer. They asked for highest and best, and I made my cash offer with no inspection a couple thousand below list.
I could not believe I got it. Work is starting Monday on this one.
This home was an REO on MLS that was priced super low. I made my ash offer about $17,000 more than asking price, and I won that one as well.
It is sitting waiting for a contractor to free up.
This house was an estate sale available on MLS. It came on the market active/backup, which means under contract. The contract fell through, and it came back on the market.
I made a cash offer that same day. I was notified of another offer, and I raised my offer to slightly above list and got the deal. This one is on the market and set to close next month.
This house was listed for very cheap on MLS, but I was on vacation when it came on the market. It was a traditional sale that went under contract before I could see it.
When I got back from vacation, the home came back on the market, and I made an offer about an hour later. My offer was countered, and I accepted the counter at $10,000 less than list. This home is closing next week.
This home was owned by a city and was for sale in MLS. It was listed very cheap, but was advertised as having no water, septic and possibly a squatter.
I made a full price offer the same day it was listed, and I got it. The home is being repaired: new well, electric, kitchen, drywall, windows, doors, flooring, paint and insulation. This house was bought for $75,000 and will sell for close to $200,000.
This house was an estate sale listed on MLS, and I made an offer the first day it was listed. My offer was full price and accepted before any other offers came in. I put this house on the market, and it had two immediate offers, but the inspections showed major problems that my contractor missed.
I took the home off the market, made more repairs with a new contractor, raised the price and listed it Monday. It is now under contract.
What Traits Do You See in My Offers?
If you see a common trend, it should be speed.
I make offers as soon a possible after I see a house. Being a real estate agent helps me do this, and saving commissions is nice as well.
I have lowered my standards on the amount of repairs a home needs, but I have kept the same profit margins I have always used. My average profit on my flips bought from $75,000 to $150,000 remains just over $30,000.
How many fix and flips are you working at the moment? How did you acquire it/them?
Let’s talk rehabbing in the comments below!