I have a few questions that I need answers to or even suggested ways to find an answer:
How do I find an absent owner to a vacant/distressed property? Especially when their contact info comes up as that of the vacant property
How do I find out repair cost on a property thats vacant so that I can present a proper of to it’s owner? Especially if I don’t have access to the premises
What would you suggest the best way to determine repair cost on a severely distressed property?
How do I determine the property value without using an appraiser and the after repair value?
Answers to any of these questions would be greatly appreciated. If anyone could provide a step by step process to any of these questions that would also be great.
Unless you have EXTENSIVE rehab experience I would avoid a project like this at all costs. What you are describing is a classic money pit.
In my 20+ years doing this, these homes are NIGHTMARES. It’s like restoring an old antique car. You pull off a fender and under-neath you find a rotted inner fender, under that, a rotted frame rail, under that, a rotted floor board, and on, and on, and on.
Here’s my advice…if you still want to buy this thing. It will, in all likelyhood, be much cheaper to demolish the entire structure and rebuild new. Remember when you remodel something half your time and budget is spent ripping apart and fixing problems, this costs BIG money. By doing a complete demo, you start from day one BUILDING instead of re-building.
Make sure your paying just for the land if you do this. The structure will actually COST you money to remove so deduct that from what an equivilent empty lot would cost to build on.
There are MUCH easier projects out there. You may want to start there.
Severely distressed properties can be the most profitable - because people look at them and know they are not worth anything near market - and you can basically name your own price for purchasing. But these are for experienced rehabbers - because, like fdjake said - if you don’t know what you are doing you can severely underestimate costs on a project like this. It is better to make your first couple of deals more moderate rehabs while you learn the process and find a reliable contractor.
As far as costs. The best way is make friends with some contractors and ask them for a quote. Let them know what you are doing, that you want them to give you a detailed quote. After you have done this on a few you will start to get a feel for how much it costs to fix items in your area, based on local labor and materials costs. You will also start to learn ways to get materials cheap - and save lots of money. A smart rehabber can often get a rehab done for 50%-65% of the cost a contractor would do it - by buying materials smart and subcontracting out the individual trades. It takes a lot of time, though.’
And sorry to tell yu this - but you HAVE to know the ARV to do this. If you don’t know, get a book on real estate appraisal or a real estate agent’s book that teaches Comparative Price Analysis.
The first couple times you should insist on an appraisal being done. See if you can contact an appraiser and ask him what he would charge for a “drive by” appraisal. Some won’t do them - some will for $50 or so. But if you don’t know a reliable ARV then there is no way to analyze a deal to see if it is profitable.