I’m a new investor just getting started in wholesaling and I had 2 questions to ask. The first is how do you normally estimate the repair cost for properties? I’m not a contractor so I went to make sure that my figures are accurate when I make the offer so that once I have a deal under contract I know its a good deal to flip. I’ll have my clauses in the contract but I know some properties in my area will be in worst shape than others and I just went to make sure I’m in the ballpark. My second question is when assigning the contract does the investor/buyer pay me everything up front or do I have to wait until closing to get paid?
Start to call contractors and get estimates of how much they charge for different things. Paint you can do yourself and figure for 100 per room for T & M (Time and materials). Carpet & pad for $18+ per yard installed. Water heaters are x$ installed. Vinyl is y$ per sqft, re-roof is z$ per 100 sqqft. of roof, countertops are so much per linear foot, and so on. If you know a property manager or agent with rentals they will give you some good contractor referrals.
Save the #'s for all good contractors!!
Create a document that has all these cost #'s on it until you memorize it.
I have it kinda in my head these days but it takes years to get the knowledge.
Generally, I usually spend $6-10 dollars per square foot of interior for cosmetic fixers. Carpet, paint, vinyl, garbage, water heater, vapor barrier, hauling, etc, etc, etc. That $6-10 does not include major stuff like roof, dry rot, windows, doors, furnace, etc.
Stay away from homes that are in need of major repairs until you flip a few cosmetic fixers first.
Some deals are up front and some are at closing. It depends on how solid the deal is and how strong the relationship is between the parties. But I’d say most finder fees are paid at closing.
Be sure to learn how to find deals first. That is the key to winning. The money is made in the buy.
the house buyer
Thanks Jim for the information. I really appreciate it.
Can you suggest the BEST ways to find the deals?