Property Rehab: Fixer-Upper and Construction Talk

Hey everyone-

I'm in Los Angeles and looking for partners to rehab and flip properties. I prefer someone local but definitely open to equity partners from other parts of the country.

Let me know if you're interested!

-David

I'm looking for a new property to buy and fix and flip. I saw a property today and I analyzed the deal and I have my maximum offer price. It is below what the wholesaler is even asking for.

I doubt the house is going to sell for what they're asking. However, the house is in need of complete reconfiguration (garage, kitchen, entrance, rooms, bathrooms) and almost everything is missing in the house.

I'm estimating a 70k amount for the fix up. I'm wondering if I will even consider it if they accept my offer.

Question is: if you're not too excited about a house but the numbers work (the area is a bit sketchy), would you still go for it?

Thanks for your feedback,

Sam

I'm curious... those of you who do fix & flips, do u ever replace the insulation? I feel like, after 20, 30, 40 years, the insulation in the walls must be in pretty bad shape. I also wonder if thats why electric bills are so high and u can hear ur neighbors tv even tho theres a good 20 feet between the houses and ur windows are both closed. lol but seriously. Wouldnt that be a huge selling point? I've never listed a house in my retail RE career where the owner has recently replaced it, nor have I seen it mentioned in any listings Ive shown buyers. Why is this not something thats done more often? I assume the walls have to be opened (duh) and maybe u need a permit for that?

I recently put a property under contract for $65K that had "foundation issues with recent sold comps ranging from $180-$225K closed in the in the past 6 months, and it was because everyone was afraid of "foundation issues!" Now as scary as "foundation issues" sounds, the city engineer told me that as long as a certified engineer signed off on it I was good to go, and the certified engineer said that as long as the foundation is structurally sound and level it would pass. Turns out all the property needed was a level floor poured over the existing floor in the basement and the basement finished total cost of $30K, putting me under 45% ARV after all costs!!!

Roof issues are another one that scares alot of people away, but usually isn't as expensive as you think!

I read a great article that had some great money making ideas to help with rehabbing a property to make great money! I took just a small part of it that really stuck out to me and included it in this forum. I’m glad that there are so many people out there smarter than me willing to teach me like this article, if I’m just willing to learn and have an open mind.
I hope you find this helpful.
By The Street | Zillow – Wed, Sep 5, 2012 6:34 PM EDT
Guess which has most return on value?

I found a really great article that talks about rehabbing properties and doing things that make a big difference in the resale-ability of the property. I always find that kitchens and bathrooms are one of the best places to start in any rehab project because these two rooms appeal to people as they are walking through a house. I appreciate every time I get to read articles from experts out there, and I always like to share these with my fellow Dean Investors.
Enjoy!
By Paul Bianchina
Some thoughts on kitchens
Kitchens, of course, are one of the biggest sellers in home design. Some designers are getting away from traditional "work triangle" design, and are looking more at designs that work for specific users.

can anyone tell me if there is a special sheet that one gets for the boots on the ground tour to lowes on how to figure rehab costs? I have a sheet on costs, and just wonder about comparing.

I haven't done this and wonder if you can share any secrets or nuggests, as I am not able to do the boots on the ground right now. Thanks, Tammy

I have a question for the experienced investors... when it comes to doing fix and flips or fix and holds, what do you do if the property is in a bad neighborhood? I come across a TON of properties that are less than 30k (which is unheard of in the DFW, a 2/1 in a decent area is at least 80k) but I know the neighborhoods are the ones that I would be scared to walk around at night. Do you walk away from them? Do you do the minimal repairs and hope someone who grew up in the area and isnt afraid but wants a nice home will buy it? Do you DARE hold it as a rental??

I found out today that when you measure you should start at the 2" mark and minus 1" in your measurements. It seems that the metal end is not always on from tip to the one inch measure, so better start at 2 inch. I was putting up blinds and couldn't figure out why until much later why the cut was coming out wrong. Seems some people already know this!

Q. I'm about to hire a contractor to redo my kitchen. The pictures he showed me of his previous work looked terrific, and he had the lowest bid. But he wants me to sign a permit application document. I thought this is something that the contractor should do. Am I being unreasonable?

--Marblehead, Mass.

A. Not at all. In fact, no matter how pretty that contractor's pictures are, I'd view his request that you to pull the permit as a red flag. No good can come to you from this arrangement, but you could experience a lot of harm.