I Got my 1st deal. I was pissed a few weeks ago as i had another deal slip away the same day i was going to make my offer. it was the 3rd time that happened.
Well I found a steal in the city i live in. I have been looking at properties as rentals in a bigger city about 30 minutes away. The reason i think i got this deal was because it was listed by a RE agency in that bigger city. I couldn’t find it on our local MLS listings. It was way undervalued. They used comps i believe off other 4/2 houses in the city in lower value neighborhoods or they just based the listing price to cover the amount owed.They were close about 5K difference either way I’m happy they did. I’m lucky in a sense because i happened to look at what properties where listed in my city with their site. They have a different listing system. I found this house on there friday afternoon, drove to it got out and looked it over from outside, yard, exterior, peeping tom through the windows etc… tried to have my buying agent get the code saturday no luck, their office is closed over weekend. Monday we checked it out and made an offer, with an acceptance date for today by 6pm. I didnt want anyone else seeing it and taking it from me, it was on the market for 7 days. 6:44 got a call we got an accepted offer. I’m ready to get in rehab and resell it. I think i could throw a new for sale sign as is for 30k more than i bought for tomorrow. I just hope theres no surprises come inspection time.
I’d like to thank alot of you guys on here for helping me gain knowledge of REI.
Liquidity - I remember your other post where you shared your frustration for missing a deal because you waited too long to submit your offer… Am I right? I believe someone responded that you had to learn from the experience and move on. I guess the advice was spot on… you moved on and found a good deal shortly after.
yup that was me and i was frustrated. I learned from those experiences and this time I moved very quickly. I already knew the area so i didn’t need to re-assure myself. I already had my offer price thought out before seeing the inside of the house and spent maybe 10 minutes inside and then went straight to my buyer agents office and filled out papers on it.
There is absolutely NO REASON for you to make costly mistakes on your first project. I hear people say things like " Yea, I spent more than I should have on the rehab." There is NO reason to do this. Buyers buy with their EYES. The majority of people could care less that you put in a top of the line water heater. FORGET that. As long as it’s NEW, It’s GOOD!! I’ve seen a KITCHEN FAUCET SELL A HOME for me!!! I highly recommend spending money in the KITCHEN…but…DO IT SMART!!
Example… so many guy’s got into GRANITE during the boom that prices have fallen BIG TIME…Granite in kitchens SELLS HOUSES, especially in lower end/starter homes. I can get 12 feet of granite counter top INSTALLED with a new undermount sink for $800!!! I REPLACE cabinet doors (see below), put in a stainless steel frig and stove (same as granite, EVERYONE makes them now so prices are LOW, less than $1500 for both) Spend some money on that stupid FAUCET!!!
The biggest mistakes I’ve seen first time guy’s make are…
Ripping out a perfectly good kitchen. A lot of older homes have “built in place” kitchens. You know, the ones with the flat plywood doors and draw fronts. Their usually stained birch or maple cabinet grade plywood. These cabinets are built like TANKS!! If you have them, KEEP 'em. Replace JUST the doors and draw fronts. I use www.lakesidemoulding.com for this. SUPER fast service, and their web site is a snap to use. they’ll ship the doors right to you in about 2 weeks… Take off your old doors / draws and paint what’s left a gloss white. Spend a little time sanding and smoothing the old cabinet boxes. Once the doors and draws arrive prime and paint them. Install new hardware, a new counter top and sink, BINGO!!! New kitchen…DONE…in a week for a FRACTION of the RIP out cost.
Trying to do EVERYTHING yourself to “SAVE MONEY.” Forget this…
In this economy you can get painters, tile guy’s, carpenters, ect FOR DIRT. How much faster can 5 guy’s paint your house compared to YOU? How much faster will your project get done with 4 subs working at the same time??? I pay $150/room for interior paint, including trim. TAKE IT or LEAVE IT! That’s what I pay. I can get a 3 bed/ 1 bath ranch house painted for $1000 including ceilings, walls, and trim. DONE in 2 to 3 days!! That same job would take me 2-3 weeks and I HATE painting. For $1000 it comes out PERFECT. While their doing the inside, I have 2 guys OUTSIDE painting. Whole house painted in 2 -3 days inside and out!!!
Giving a subcontractor money up front. DO NOT DO THIS!!! If you do… YOUR MARRIED to him. I buy ALL my materials. That way if a sub is a NO SHOW, I go to the next guy on the list and the materials are already on site. I tell my subs up front…You don’t show up without calling, someone esle will be here the next day doing YOUR job. I’m polite about it…but I want them to know up front that NO BULLSH*T will be tolerated on my projects. These guys are MASTERS at knowing WHO they can play, and who they can’t. Once they know, YOU KNOW…they won’t even TRY screwing with you.
Not having a PLAN of attack…I like to break my projects into 2 parts…The INSIDE of the home…and the OUTSIDE. By doing this you can have BOTH going at the same time. Start with the clean out. I used to do this myself. HUGE WASTE OF VALUABLE TIME!!! If the house is filled with junk…a crew of 5 guys can have it COMPLETELY cleaned out (including pulling up the old smelly carpets) in ONE DAY. Speaking of carpets…take this from someone who knows. IF THE HOUSE STINKS…IT’S THE CARPETS!! Get rid of them and THE PADDING!!! DO NOT waste a single dollar trying to shampoo the stink out.
Once the clean out is done. Have any repairs, carpentry, electrical, or plumbing done. Then get the painters in there. Last guys in should be flooring.
Picking the wrong colors…COLOR SELLS HOUSES!!! Go to THE BEST, most expensive, new housing developement in your area. Bring a color wheel with you from Sherwin Williams or Ben Moore. The big developers spend THOUSAND$ on designers. They know how important color is. MATCH their COLORS and keep it simple. ONE COLOR for the walls, GLOSS white for the trim. I use the same interior paint color on EVERY house I do. If I have left over paint, I SAVE IT. It gets used on the next project.
Ripping out a perfectly good bathroom because it has 1950’s PINK and BLACK tile!!! DON’T DO IT!!!These tiles and bathrooms are TOP QUALITY, the floors alone can have up to 3 INCHES of CONCRETE under the tile. Save yourself a FORTUNE by hiring a GLAZING COMPANY (yellow pages). These guy’s come in and use a urethane epoxy paint to cover the old tile. I have them paint the sink, tub, and toilet white, then the walls lite tan and the floors a darker shade of tan. They’re IN and OUT in 1 to 2 days TOPS. Usually costs around $1000!!! When they leave…your bathroom remodel is DONE!!! The finshed product looks like a brand new sink, tub, toilet, wall tile and floor tile remodel!! If the faucet and shower valve look old just replace them. $150 for both and your bathroom is a SHOW CASE!!!
Good luck with your first project. I think you have a real winner here. If you need any advice at all just fire away!
I just got back from signing the banks purchase agreement. Only thing we had to do was add an addendum to it for inspection time. their agreement stated the buyer had 5 calendar days from when the seller executed the purchase agreement. We had that changed to 5 days after utilities are turned on and are working properly.
on a side note i had my buyer agent ask if they could give me the code so i could go and see the inside of the property more (my brother wanted to see it). Well they gave her the code but told her that i would have to be accompanied by a realtor. Also if i was found in the home by myself that THEY WOULD HAVE ME ARRESTED. :bs My reply was well thats not friendly of them. I just thought that was interesting.
all in all everything should be moving along and i should have the deal closed by the 27th or sooner.
I Got my 1st deal. I was pissed a few weeks ago as i had another deal slip away the same day i was going to make my offer. it was the 3rd time that happened.
Well I found a steal in the city i live in. I have been looking at properties as rentals in a bigger city about 30 minutes away. The reason i think i got this deal was because it was listed by a RE agency in that bigger city. I couldn’t find it on our local MLS listings. It was way undervalued. They used comps i believe off other 4/2 houses in the city in lower value neighborhoods or they just based the listing price to cover the amount owed.They were close about 5K difference either way I’m happy they did. I’m lucky in a sense because i happened to look at what properties where listed in my city with their site. They have a different listing system. I found this house on there friday afternoon, drove to it got out and looked it over from outside, yard, exterior, peeping tom through the windows etc… tried to have my buying agent get the code saturday no luck, their office is closed over weekend. Monday we checked it out and made an offer, with an acceptance date for today by 6pm. I didnt want anyone else seeing it and taking it from me, it was on the market for 7 days. 6:44 got a call we got an accepted offer. I’m ready to get in rehab and resell it. I think i could throw a new for sale sign as is for 30k more than i bought for tomorrow. I just hope theres no surprises come inspection time.
I’d like to thank alot of you guys on here for helping me gain knowledge of REI.
Can you tell us was it a reo or what? What was the arv and what were they asking and what did you offer? Thanks for the info. :}:} I am curious as to the comps and how much lower you offered than what they asked. :beer
It was a foreclosure. listed for 85k i offered 80k (i woulda offered lower but wanted a fast acceptance before someone else bought it to live in)
As for comps I was trying to get a house about a block away that was a 3bd/2bth with 300 less sq ft and was out bid. it sold for $110k. $10k above their asking price. that too was a foreclosure.
theres also a 2/1 house 2 blocks over thats less than 1/2 the sq ft thats priced over 80k and i seen pictures. My foreclosure looks better than it right now.
ARV i would say its worth $135-$160k. If i were get an appraisal I’d bet it would be valued @ 150k.
the market here is pretty dead though. I only bought this house because I’m sure I can sell it because of it’s location and price.
I will throw between 5k-10k in renovation’s into it. My friend was like re-sell it as-is for $110k, see if it sells if not then re-hab it. It has all the appliances in it aswell. yard was just mowed by the city too. I cant wait to look through it again and brainstorm.
Just a thought - why don’t you put it in the market for $110k now and start your rehab… As you complete stuff you can raise the price accordingly. Like, complete the painting - raise the price to $120k. Complete the flooring, raise it again to $130k. Anyone seeing the house will know that the price will go up as you complete the work. This may cause a sense of urgency in them…
In addition, a house increasing in price!!! I bet you would get some people there very curious about why the house is going up in price… :O)
I haven’t decided on a lot of stuff yet. especially on marketing, should i use a realtor ? ive seen places that charge like $250 to have your listing put on the MLS. but then i thought what if someone used a buyer agent to write up an offer ?? do i have to pay the buyer agent 3% commission ?? Houses sell themselves not realtors.
one thing i thought would work to my advantage was if i get a qualified interested buyer i could add a item they would really want deck, hot tub, pool etc into the contract. that way they could pay it off over 30 years instead of buying the house and having to fork-up 5k for something they would really like now.
I just picked up a re/max homes magazine yesterday, you know those free ones you can pick up at stores, gas stations, fast food places etc. Well As i sat on my throne I’m looking it over to see what house’s are selling for that are comparable to the one I’m closing on.
Guess what i find on the 3rd page… My house listed for $145,000. the picture is from winter. I found out some new things about the house as well. new furnace in 2004 and new roof in 2000.
obviously it didnt sell for $145k but still I got a great deal. :beer
Congratulations to Liquidity for jumping off the pier and testing the water on the first rehab. You will learn a lot. Get the book, “Flip”, it has real numbers and tips. Worth every penny.
fdjake: I keep printing your great rehab tips. You’ve got to stop, am running out of ink. Seriously, your tips are practically money in my pocket. Thank you. Keep them coming please.
Just got back from the home inspection everything went better than expected. there was a few spots of mold in the lower level of the bi-level on the drywall and carpet. Was hoping it wasnt a foundation issue and it wasn’t. Its a pipe thats gonna be easy to get to and fix. Central air works, all appliances worked which were pluses. garage was insulated and had heat/air duct to it also.
I’m ready to close on this bad boy monday. a very little rehab, mostly paint and flooring, a little bathroom and kitchen work and back she goes on the MLS.
i got a question for RE agents, when the best window for home sales between which months ?? i figure the spring is good and the summer is probably the best time to sell homes.
Summer can be a slow time for home sales, lot’s of vacations but NOTHING like winter. Things usually pick up in late summer and fall.
What you need to remember is you have until roughly late October to sell this house. Once you hit November, buyers thoughts turn to Thanksgiving, Christmas, ect. Your dead until spring.
The absolute KEY to your rehab is getting a SCHEDULE together. Make absoluely sure your painting contractor has at least 3 guys if the entire interior of house needs painting. If your replacing carpet, get it out the day you close. This allows the home to air out a little.
Don’t make the mistake of thinking buyers won’t care about the small stuff, THEY WILL. Have your painters hit the inside of all the closets, spend some time CLEANING or painting the INSIDES of your kitchen cabinets. Don’t try and save money by not painting ceilings. New wall paint will make a decent ceiling look like sh*T.
Here’s how I do it.
Clean out…right down to the carpets getting tossed. Sweep it out and have any plumbing, carpentry, or electrical work done AT THE SAME TIME!!! These trades can all work in that house on the same day. Get them in there and get them OUT.
PAINT…paint sells more houses for me than anything I do. PICK COLORS WISELY. A crew of 3-4 painters can have an entire 1300 sq ft home painted (interior) in 3 to 4 days… TOPS!
Flooring…Hardwoods ALWAYS go in LAST. Do carpets THEN hardwoods. I usually put carpet in bedrooms. You can buy plastic drop cloth and tape it over the closed bedroom doors so dust doesn’t get on your new carpets. I like getting the carpet done BEFORE the hardwoods because I’ve had carpet installers drag the new roll over a hardwood floor and screw it up. Carpet goes in in 1 day!! The last guys out of that house should be hardwood flooring contractors. Shut the door, let it sit for a few days and your DONE!
CLEAN, CLEAN, CLEAN…windows, inside cabinets, buyers WILL open EVERYTHING so get the frig and stove SPOTLESS. If the budget allows just buy a new stove and frig and BE SURE to leave ALL the stickers and tags on them. You want your buyers to KNOW this stuff is NEW!!!
One last thing…ASK if you have a doubt about something. It takes very little time to fix something BEFORE you start DOING it.
Get in, get it finished, and get it on the market as fast as you can.
Where’s the best place to get carpet from ?? anyone got any tips ??
or should i just ask a few carpenters for a quote ?? they should have a good source on cheap carpets i would think since that is their trade.
I’ve some posts on here but most of them were for rental carpets and were used. I tried looking up carpet on craiglist but didnt find anything that i really liked or thought was a great deal.
I still have to figure out the layout i’m gonna have with the flooring.
so far I’m keeping the floor from the living room through the kitchen to the dining area. Its a wood laminate i was thinking of replacing but from going back a few times and looking it over it’s done professionally and looks and feels good. the home inspector even mentioned it looked real nice and he wouldnt replace it.
the upstairs i’ll probably replace the rest of the carpets (2bd+ hall way) with new carpets. 1 bedroom would probably come clean with a good cleaning. the other needs to be replaced ( too stained). the bathroom’s I’m gonna replace the laminate for marble flooring (on sale @ menards there almost out so i’m gonna some today). The marble I can do myself or I’m gonna have the guy i learned to do tile from do it also (i planned on him doing the small tile around tub/ showers).
the basement: theirs a laundry room that leads outside there i’m gonna put ceramic tile in. then theirs the 2bd rooms again want to put in carpet there and 1 bathroom same marble in there. the open room i guess ill call it the rec room I’m still debating what to do there. i guess i’ll have a better idea when i go back on monday.
Well I’m off to lowe’s and menards in a little bit. Lowes has a replacement window installation deal for $99. That house has the old single pane windows and they need work, some have cracks, alot of springs broke so they dont stay up without help and more stuff. It’s better to replace them with a energy efficient windows, I’m in michigan so that should help with the sale and buyers heat bill come winter.
Lowe’s deal on window installation is $99 per window. I didnt read that part when i seen it and it also says only for SFH not multifamilies or commericial properties so thats why i thought it was for the whole house.
then i tried using some coupons from lowes printed off my email for $10 off any $25 purchase and menards wouldnt take them becuase they were printed off the internet / email. so I was pissed, i just left my cart sitting there with the tile. I’ll go back when i get them in the mail i guess.
I thought sundays were supposed to be stress free, lol