I have been looking for a rehab project. Have a realtor sending me listings , went to see many - made offers - offers turned down.
Contacted a couple wholesalers found on craigslist in my area .
Sent me 12 deals so far to look at . All with asking price , repair estimate and ARV.
Just looking at the numbers on paper looks good.
Once I start going to see these properties things start to not look so good , all of there ARV seem 30-40k to high . yes they do have one or two SLD ( 230-240k ) comps to support there ARV , but when I dig a little I can find say 20 or so active comps for 200-209K . Now the way I see it is my rehab has to be at 195K ARV to give me a chance to sell hopfully quick??? Now all these deals seem like no deals to me?
I want to be the best value when I sell , sell quick and im looking for a potential profit of 30k for doing most the rehab work myself. All around me the market is saturated with houses sitting. Am I unrealistic in my profit number? All I am looking for is 3 rehabs a year at 30k profit . How is everyone eles selling there rehabs - price it to sell right? Where are the real deals , I quess I need to start advertising for motivated sellers.
Thanks
…Dennis
The “real deals,” as you put it, go very quick and often times never really make it to the open market. It pays to get to know the right realtors and get on their call list. Keep trying and you’ll get one. I like to get the properties that everyone has passed on already. Usually means more work for me, but I hate getting into bidding wars for properties.
Nobody can comment on your expected profit numbers. There’s way to many variables and you really didn’t give an example to go by.
Here’s a huge bit of advice. You won’t be able to do this on your own and have time to find more properties, get insurance, set up utilities, meet inspectors, buy supplies, meet contractors, buy more supplies, hang drywall, fix plumbing, blah, blah, blah. Trust me I’ve tried to do it that way. You will need a team. Try to put together 3-4 guys that you can pay to do most of the work for you. Pay them hourly. Work with them when you can, but you will be insanely busy with other issues. It may seem like hiring guys is just sucking away at your profit, but it’s really not. Look at it this way, with a crew you get done faster, which means on to the next job quicker and hopefully a quicker sale. What cost you the most money is not having your house(s) listed for sale and not having a house(s) getting ready to list. You can go at it for months by yourself, and pay the mortgage, insurance, utilities, etc. Or get a crew and be done in a month or less.
Your own assessment that you probably need to advertise to find motivated sellers is probably on the right track, especially if you are working in a competitive area. Although I am only small time investor/rehabber I have yet to see a single property (in 5 years of doing this “semi full time”) in the MLS or via a wholesaler that made economic sense.
Admittedly, my target area is a little more upscale ($200K - $400K) and has been less affected by the RE slump than many. However, without advertising and working my target areas (driving for dollars) I would never have found a single REAL deal.
I also do much of the rehab work myself but as landlocked noted, find yourself a good team even if that team is just one other worker/laborer/helper. Many jobs go more than twice as fast when someone is helping you and depending on the specific deal, carrying costs and/or lost rent can be more than the price of labor.
I am a full time contractor , so is my brother as well . I have flipped 9 houses so far over the years. My brother helps me with the remodel. So there is 2 of us working when I get a project . We do all phases of home improvements. My goal is to flip houses full time , and get away from working for home owners and in there homes .
To take it full time I need better deals . All houses Ive flipped were from the MLS. Made out ok but not much better than I could of if I was doing contracting work during that time.
What has been the most productive dollar for dollar marketing for you?
Do you think $250 a month marketing buddget would be to small?
With that I could get a small ad in a weekly paper and put out 100 bandit signs a month
Well placed bandit signs seem to be the best marketing bang for the buck. However, be advised that bandit signs are “illegal” in many areas. After being contacted by the local code enforcement officer ($1200/day/sign fine) I started placing them only after 4:00 PM on Fridays and taking them down by Sunday night.
I place an ad in the local weekly “Ad-Lines” paper for my area that costs $75/week, with limited response. But is does get my name out to my target areas.