Does anybody know where I can find some type of online based software I can use to communicate with my contractors and other employees of my company. I run a fix and flip operation and I’ll be running about 5 jobs at once in the next 6 weeks.
I flip house's, we will do about 20 of them this year and expect to do 30 to 50 in 2010.
I do a full take off of estimated cost’s for each trade section (AIA) format and calculate cost’s, I use a standard excel spread sheet.
For critical path schedules I use microsoft projects and schedule in order of necessary steps (Critical Path), and stack contractors.
Most construction related programs are pricey, there made for a construction network and can run in the thousands of dollars, Primavera is one.I do not recomend buying a proffessional application as the learning curve to utilize the software can take years.
Make sure you write your contracts with a very complete scope of work, and your expectations of your contractors.
How are you doing 20 flips a year?
meaning how are you coming across so many deals?
Are you using hard money lenders in combination with private investors?
And what state are you in?
Gold River, thanks for info! Your info looks like it will help me with management and budgeting.
We are buying properties in the working buyer class of homes meaning we are buying properties between $50k and $110k. We look to resell these properties for between $100k and $200k.
We are buying through MLS searches for distressed and abused properties, buying through wholesalers, buying REO’s through banks and buying at the property disposition auctions. (REDC is an example)
We are buying with hard money (18% no points & $1k set up & recording fee), 20% down into every deal reguardless of experience or track record, we are using and making some deals with investors seeking cash returns for the cash capital portion of our flips, but mostly we are using our own cash.
(We have been giving cash investors 8% plus 20% of the profits)
We are flipping houses in the greater Phoenix and Tucson area’s of Arizona and occasionally in Las Vegas, Nevada.
We are averaging buying about 5 homes a quarter, we are averaging 6 to 8 weeks for a full interior / exterior rehab and averaging 30 to 45 days on market for a sale.
We sat out of the market for all of 2007 and up into August of 2008, bought a rental to rehab last August and have been expanding our purchases according to our ability to sell all year.
We currently have 5 homes, three sold this last 30 days, two already rehabbed and waiting on closing, one just being completed and was our latest sale last weekend and two in the process of rehab.
We our searching for 2 or 3 to buy right now and we are on track providing our market keeps buyers looking for good values to do 20 this year.
Gold is your name. I can see that now.
You have my respect.
Thats where I plan to be flipping that many properties.
Ill be happy for now with 2 a quarter.
18% with no points would probably be the same if the interest were lower with some points added - right?
So when you rehab do you do minimal rehab - meaning just get it to look nice or do you go full blown tile, granite tops, stainless steel appliances and stuff?
Another question if you don’t mind :biggrin
How are you structuring your deals so that you can close on them successfully?
Meaning how much are you offering on your EMD, no contingencies, how many days of inspection, and are you selling to FHA buyers, conventional, VA?
Okay so they were lots of questions.
Im just astounded by the frequency of your offers getting accepted and the apparent ease to which you rehab and flip your houses. ( I say apparent ease because it looks that way on paper but I’m sure it’s lots of work AAAANNNND I say it as a compliment… not as sarcasm)
:beer Heres to your continued success!
On a one hundred thousand dollar hard money loan, 18% is $18k a year pro-rated so a four month holding period is equal to $6k dollars.
A 12% loan with 2 points is equal in cost to the 18% above, but if you had to give 2 1/4 or 2 1/2 or 3 or more points it actually would cost more, assuming set up and recording fee’s are equal and you held for the same 4 months!
Our hard money here is no qualifying, no credit check, no questions, no history, and no record of previous flipping experience.
We are doing full exterior rehabs with complete gut and re-do landscapes, irrigation, hardscapes, exterior paint, windows and pool remodels if applicable. We do complete interior repairs, strip acustical cielings, repair wall and door damage, custom repaint of interior with white ceilings, colored walls, white doors, door casings and trim. We clean and repaint vents, replace all switches, plugs and plate covers and new fixture’s if required.
We replace vynal flooring with 18 to 24 inch tile (Depending on what we catch on sale) we will also do complete kitchen gut’s or bathroom gut’s as required, but normally don’t end up doing everything, it’s kind of a judgement call. We generally replace the appliances (Dishwasher, Microwave / vent and range) and we install new carpet throughout.
All properties get new deadbolts and door locks keyed the same for all exterior doors, replace door stops, hinges, pass through door knobs, privacy doorlocks as required. We generally replace toilets, kitchen and bath faucets, and install new towel bars, toilet paper holders, robe hooks, etc.
We re-finish hand rails, repaint interior railings, replace interior trim in baths and kitchens if required because of water damage.
Most properties in this price point are re-done with formica counter tops and pho-marbel one piece bath counter tops with sinks, there are some exceptions to this but generally buyers in this price point are expecting these types of finishes.
We buy all cash close in 7 to 10 days, for a lot of transactions we choose to have our hard money people record documents without title insurance or escrow prorations, and tend to choose bank REO’s or Wholesalers properties because we know the banks guarantee title.
We can sell either conventional or FHA, buyers come in and have been generally requesting inspections, some request 3% contributions to closing cost’s and some request home warranty policies.
Our latest sale is FHA, the buyer has to wait to close because of the 90 day FHA seasoning requirements, we finished a full interior / exterior rehab in 7 weeks.
I have a professional background in project management, have been a licensed contractor and have 30 years of construction experience so I make it look easy in spite of the problems and pitfalls.
In my area there are a lot of properties that can not be conventionally financed because the appliances, sinks, toilets, etc. have been stripped from the home and some of these homes are so bad that most people can’t afford to buy it and rehab it, so fixing and flipping has become a demand market here, just to clean up the foreclosure mess.
We juggle properties, general maintence for finished inventory, our subcontractors, acquiring materials and setting schedules, on top of that we have to directly manage the process.
I have other businesses so I work a 60 hour week outside of doing house flipping, so I have had to become really good at managing time, and getting the most out of a work week.
Thank you for the lengthy explaination.
You’re right years of experience makes it seem a flawless operation.
I have been trying to submit offers on properties that have no appliances and that regular homeowners can’t afford financing due to the condition of the property but there are a couple of wholesalers/rehabbers in my area. So there is competition. Especially since the inventory has somewhat dried up.
I know not all houses are the same but the rehab work that you do on houses what do you figure is the average rehab cost for complete interior repair that you mentioned?
Lastly, your HML is he local or does he lend to california??
To your success,
We average rehab costs between $25k and $45k depending on condition and our vision for the property.
This average depends on the demand for electrical, plumbing, mechanical or roofing needs on site and problems we have to mitigate.
We have one property we are currently rehabbing with a $65k budget, it was completely gutted, but this is an exception rather than the rule.
(Some other investors started it but went broke before they could really get going and the house was foreclosed on.)
The hard money guys here are all local that I know of, I will have to keep my ears open!
If I was going to rehab a house should I entertain Primavera and Microsoft Projects?
Also, if dealing with a contractor how should I write up a contract with him and how much should I advance on the job?
Is it customary for contractors to put liens on rehab projects?
Primavera is a professional Contractor Software program, it is very complex and someone must set up the factual hard and soft cost data in order for the program to work. Most professional programs take years to become compident to work with effectually, I do not recomend using these programs because it is a huge steep learning curve, and you would end up in front of a computer learning rather than investing.
For your second question it is not so much the contract as it is the scopes of work and how to utilize and enforce them, this is way to involved to answer here as the contract and scope is specific to the sub-trade.
What to make available to a contractor or sub-contractor is relevent to the work, the labor and the schedule.
You are welcome to contact me by PM and give me some direct way to personally contact you.