Suggestions For N00b With Cash
i am ramping up my real estate career. recently passed RE salesperson exam, close to passing broker exam (decided to get it even if i dont use it - in study mode so i just decided to knock it out). i have cash, time, and desire.
however, as john t reed puts it, i have a bit of analysis paralysis. i would like to find a decent rehab project to get my feet wet/juices flowing/etc.
since i also have time, i can work a bunch on the rehab myself. im not going to go overboard, but i definitely want to get my hands dirty. my biggest fear/hurdle is finding a decent project locally. i went to my local REI club, and people got up to talk about properties they have found, but i was a bit too skeptical to write down names/numbers.
my thoughts are to find someone who is familiar with the market, find a property, and bring them in on the deal, with the fee being paid on the backside. my thinking is that i dont want someone selling me something that isnt the right project. i am happy to give a good portion of the profit on the backside - but i want them to sort of be on the hook through the project.
thoughts/comments?
When you say "familiar with the market" what do you mean? Are to talking about the local real estate market? If so, a few calls to some agents should suffice for info on markets. They should be able to give you prices and the current market velocity in your area.
Bringing in a partner is giving too much away. In terms of the right project, a contractor and a home inspector is likely to give you more useful information. One of the major uncertaincies concerning rehabs is the holding costs. The two major contributors are time to rehab and time to sell (if you are flipping).
You need to consult with a structural engineer, that way you can get estimates based upon those recommendations and thereby make your determination.
NC_Yank
I concur,
Get someone else in the boat, an egineer would be great or even a really experienced contractor should be able to point you in the right direction..
[addsig]
"Building Inspectors are NOT responsible for violations they miss..........YOU are. I know of no state law that allows building inspectors to be liable for violations they miss...................."
Right, NC_Yank. You BUILD quality into a job.
No inspector can INSPECT it into the job.
(Hey! "Free advice?" Well, send me back my cash! )
And if the electrician is licensed by virtue of a skills test and/or demonstrated level of experience under a licensed electrician, then he/she probably has the skill and ability to avoid the types of errors that are nearly impossible for an inspector to find.
Abusive pulling of cable and kinking of wire come to mind.
I wire my own work at home, have wired entrances in Pennsylvania, but in NC, my rentals will see a licensed electrician.
[addsig]
Mike,
Your right, many local governments will allow you to do various phases of construction that ordinarily would require licensing, however they often require a proficiency exam or equivolent.
If a person is as proficient as they claim, then such exams should pose no problem.......I am afraid of those that think they are but yet want to find ways around the law without showing such level of proficiency.
NC
Its all about experience, it just comes with time. I have been doing bids for many different types of construction for the past 12 years and I still come in low at times. just go room by room and always add 10 to 15% to your time and your materials.
find a good handyman ,treat him right andpay him well,also make sure you can trust him because I am a handyman that does rehabs and I feel out my customers,even run background checks on them to know I can trust them,if I donot trust you I will not work for you,if your a tightwad I will charge you more just for haveing to put up with your penny pinching,all things aside I can do almost any thing for 10k including part and labor,new kitchen,windows ,tile ,and paint
I have been at this game for nearly 17 years now. I always work backwards from the After Repaired Value (ARV). Then I subtract my estimated repair cost, holding cost and all other expensive that are associated with flipping property. Then I subtract an additional 5% from the future ARV to come up with my highest possible offer. It may take you some time to gain the experience, but I have found this works well for me. It has failed me only once because I over looked a serious foundation problem. Good luck.