First Project
I am a general contractor and I have been renovating homes for sometime, for owners as well as investors. I am moving from New Orleans to Raleigh North Carolina to be closer to family. I need advice on my course of action here, I want to start purchasing homes and renovating to sell at a profit. I will be working with around $50 - $70k, Where should I look to find the best deal on a rehab project? Real estate agents, forclosures, REO, wholesaler? Do you think I can do this with 50 -70k? I know how to fix a house and will do most of the work with my crew. I was thinking I could put 20% down finance the remaining and use cash to pay for renovations. Will I be able to borrow the equity once renovations are complete. I was planning on doing this and then moving on to the next project. Is this feasable.... I would love to hear any feed back...
[ Edited by greg9706 on Date 09/30/2006 ]
[ Edited by greg9706 on Date 09/30/2006 ]
[ Edited by greg9706 on Date 09/30/2006 ]
I would love to hear about some of the first projects others worked on. What type of proerty and how it went.
You could buy the first property with 100% financing if you intend to occupy it though dont get a loan with a prepayment penalty. Then use credit cards for the rehab to earn sky miles. Keep your cash. Rehab the home and live there then you can refinance and get a cash out HELOC. Use that to pay off the credit cards and go on to your next project. Or just sell that rehab and move on. Look for bank owned properties on the MLS. Thats the easiest way. You need an agent experienced in flips who can make sure you are getting the discount you need on the front.
Ive done many rehab properties and ive learned to fid a good agent and have your financing in place before hand. Last but not least and most important, have good conractors you can depend on. Not sure about Reigh but Making great money in Charlotte and beginning to get back into my home town of Virgina Beach... If you need funding sources let me know
Try offering the selling agent a higher commission than the listing agent. Here in Ct., the typical %age is 5%. I give the listing agent 2% and the selling agent 3%. Typically, agents show the houses with the highest comission rate, first.
Hopefully, that will work. I also invest about 50.00 in "goodies" from Target, Walmart, Kmart or IKEA. What ever is closer to you. I invest in a shower curtain, towels, kitchen towels, and a nice kitchen rug. Remember.........kitchens and baths sell houses. Make it look homey in both the rooms.
Sounds like things are taking a typical course. You have to be a bit patient. Didnt you plan that the sale would take the adverage numbers of days on the market? Always budget holding costs and then you dont have to hold your breath.
How much are you trying to turn on the property? The name of the game is $$$$ and time is $$$$$$. Holding is costing you money try to turn the property for a reasonable profit and move on. You will not get rich on one deal. Is it better to make 15k on a 90 day turn or make 25k after holding for 9 months. Figure your annual rate of return and you will see.
Ive had worked with many investors for over 15 years and its true, holding costs will eat your profit fast. My advice is create a marketing plan in advance before buying property, look at the costs and plan to spend it otherwise you will eventually regret it.
Here is some future advice. Use a flat fee listing to get it on the MLS cheaply and then do some of the marketing yourself i.e. open house, flyers, craigslist,newspaper, signs etc.
Good luck!
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