The Secret To Finding The Perfect Rehabber!
Ok people, we all know that finding the right rehab property with that desperately motivated seller is one of the hardest parts of the rehab process. Here is your chance to let us all know exactly how you found all those great rehab deals that made you all that incredible $profit$. Even if you have just one or two deals under your belt, please tell us what steps you took to find sellers that would part with their house for just pennies on the dollar. I know, I know. Some of you probably want to say, "I found foreclosures and bought them" or "I did mailings in the areas I liked". That's fine-and-dandy if you want to tell us stuff that's already been posted a zillion times here on TCI. What we really want to know is...
If you had to start it all over again from scratch, what would be that one special house hunting tip, technique, or piece of advice you personally wish you had known sooner? Something that would have saved you endless amounts of precious time and money that you really could have used for banging a hammer... instead of your head!
This is your chance to tell us what would have made you the successful rehab property purchaser you are today, -but in half the time. And if you think your technique is one that we've already heard about, tell us again! I'm not asking you veterans to give away all your secrets, just some of 'em. 
Maybe there is no one answer to this question, and we know that no one tip or single piece of advice can replace solid hard work. Just please contribute one thing that you think would really help us newbies find good rehab houses.
You could start by saying something like, "I could have found my rehab properties in half the time if I had only: ____ !"
or "I was so focussed on _____, I didn't realize that all I needed to do was _____! After I figured that out, I had more rehab properties than I knew what to do with!"
Ok, c'mon somebody, let's get this thread started...
On behalf of newbie rehabbers everywhere, we thank you in advance for sharing. 
-Tom
Go to middle and lower middle class neighborhoods and look. Open your eyes. Evey vacant property... every property that is dis-repair. Park your car get your butt out and knock on the door. Tell them if they are interested in selling you'll buy it...as-is... but you need to close quickly or you will lose your funding quota for the month..... low ball it... buy it.... flip it!
Property is easy to come by....Mail post cards once a month.... be the man to go to....
Thank you Dave!!! That was excellent advice and just what we newbies need to hear. The more good information we get here the better we can do in the trenches. Keep 'em coming everybody!
I had just got out of the hospital having failed to yield the right of way to a plumber in a hurry. So all I could do was read the legal newspaper. I came across a list of recently filed mechanics liens. Guys having disputes with the owners of properties they were working on. So I went to visit the various construction sites more in search of education then anything else.
At the first one, a small house in the Valley the owner had just broken a window as he tried to install and was a little annoyed at life and construction in particular. I bought him lunch to keep him from smashing another finger. Over that lunch I bought the project. Nothng down, take over the construction, and the loan, recorded the deed the following day after notarization, almost forgot that. I had about $18,000 to complete and payments to make. So away I went 18 hours a day. Completed the house and sold it to the guy next door. Wanted it for his sister, the highly nervous one. I made a profit and polished my skills as a C-10, C-20, and the ever popular C-36.
Time on target 60 days, but long long days. My cat did not recognize me when I finaly got home, slept in the back of my truck cause vandals were coming around. I made a deal with them. They did not steal and I did not shoot.
Upon sale of the property I paid off the second trust deed I gave the old owner for the property. He was happy cause he got some money and I was happy cause the heavy work aided in my recovery from the accident. Well the plumber said it was an accident but I always felt he did it on purpose, god he had a big truck. My poor little 1981 VW pickup was not a match.
Following the recordation of Mechanics Liens is a good lead source for thos with construction skills and willing to go thru a rather large amount of BS with friendly labors and contractors. Remember when there are liens there is the possibility of negotiations to pay off said liens at a reduced figure. Also you look like a hero, getting the working man, hero of America the money he so rightfully deserves. Yeah sure. Cheers Lucius
Are Dave and Lucius the only rehabbers out there that actually have some experience??? We need some more pros to step up and enlighten us! You know how you felt when you first started out: Lost, clumsy, not a clue what to do. Well here is your chance to give back and help out the less fortunate.
Let's hear some more... who's next?
Ok, rehabbers with some/any experience, let's hear from you. Tell us about it...
I like using Realtors. Not just any will do however. You need to find the guys that specialize in junk properties. Hang out at your local real estate investor meetings and rub elbows with people. Here in metro Detroit there are a couple agents that have dozens of wholesale junker properties at any given time.
Keep in mind not to become too friendly with these guys -- they're business contacts, they don't represent you and you may need to negotiate tough with them. Don't take their word on the value of the property. Do you due diligence and then submit a low offer -- just like you would any other seller.
Make sure you can follow through on any offer or you won't get a second chance.
Dave REI,
You mentioned "Property is easy to come by....Mail post cards once a month.... be the man to go to...."
Could you please expand on your approach to the post cards? Thanks
I have only done a couple, but would have to say that using experts to do the work instead of trying to do all of the work myself and trying to pockets every penny ended costing me more than pennies in the long run. And it ended up being a longer run than I had ever expected.
I know now that it is cheaper to let someone come in, get their job done quickly, and get out. Even though it will cost a little more to have a proffessional do the work, you can also put a price on the time you will save.
Time is money also.
Taxes, payments on loans, insurance, water, electrical, and loss of use of the money and time you have invested in this one project can add up very quickly.
I like to rehab foreclosures and good HUD repos. I look for minor rehab but I never limit myself from a deal.
I use both realtors, auctions (the kind you get to preview the property are the best ones) and post cards. Only 1 out of every 3 is a rehab for me, I like to get good holding properites that have some equity (15-35%) in high appreciating areas that rent fast. so the other 2 out of 3 are those kind.
Doing construction was a way of life all my life so hanging from rafters to cutting tile has never been a problem but I admit that as I have gotten older I look for contractors more.
I like to take my time and skillfully improve a property, I have a certian reputation of the kind of home you see in my portfolio.
Our newest project is an open A frame style. This one will be a real joy. We have leased it for 6 months with the purchase delayed until we "improve" the property (6 months from Oct). We have someone to lease the house for the duration of the addition (the addition construction will not be accesseable to the tenant and fenced in for safety)
It is a 2B and we are extending the roof line with a "dormer" style extention to allow a storage space to be created into an extra bedroom. Last just before closing the other side of the "A" we will enclose for a 1 car garage. Plus update the "look" of the exterior.
We will have the home reappraised with the improvements both construction and cosmetic which will bring its value up another $20G. This will give us even more equity of the $23G we already have.
Plus we will rasied the lease payment to a three B rate. All the while the tenant that was on the 6 month lease will pay for the home while we get it ready.
This one was given to us by our realtor, the house had been listed for over a year the owners are having a hard time making payments on a house they don't live in any more. The lease keeps the mortgage intact, the tenant pays that and we get a property that the bank will just be overjoyed to finance on based on its improve value.
My $.02
Signing a contract on our first deal today. I had mentioned at work that I had been wanting to get into REI. An older gent said he was looking for a reason to retire, so why not come over see the property and make an offer. Did so, got the deal, attempted to do a land installment contract that went sour for 6 months, My partner spent about 200 hours fixing up the place and now we are selling for 44% more than we paid. After closing we need to find another as my partner is alreay anxious to keep going!
(I guess that boils down to falling into something)
First property I bought I finally talked to an agent after spending countless nights looking for "The Great Deal" on the internet.
Told the agent I wanted duplex listings that are about to expire or have been relisted at a reduced price. looked at several the first week, came across a nicer duplex that the owner had put a lot of money into that was not selling.
Went to look at the property, the owner rented the lower to her daughter and son in law with three children, the upper to her niece.
although the sellers agent was not there upon first inspection I found out the real reason for selling. She made the mistake of renting a good property to very bad relatives who were in the process of destorying the place and paying rent whenever they got around to it, not to mention telling lies about the property to us, swearing and taking the keys out of the lock box.
Orininaly listed at 155,900
When we viewed the property it was relisted and reduced to 142,000.00
After having the home owner there for the second inspection and expaining why she would not sell her house and of course more yelling, screaming and swearing from her tenants, wrote offer for 120,000.00( I felt I was being very generous)With the contigentcy that the tenants must Vacate the property and the seller must do all finall cleaning, offer accepted with in 10 minutes. Closed moved in rented the upper to good tenants, spent about 3,500 in total repairs and up keep, sold the proerty to the tenants on a zero down deal about a year and 4 moths after owning for 165,000. My next purchase was a lot more creative but the bottom line is I am now living in a 3,600+sq ft house with wine cellar, sauna, hot tub,sun room, large yard etc.. paid 225,000 property value of 325,00.00 Minor repairs are done.
The deals are out there just don't quit and always ask yourself how can I instead of saying I can't
Quote:
On 2003-09-16 17:59, TJ3 wrote:
Ok people, we all know that finding the right rehab property with that desperately motivated seller is one of the hardest parts of the rehab process. The rehab that I did in both places I have already sold was very minor (however, the first home was sold by me to a couple who did a major, major rehab well beyond my vision of what I thought the property could be, and perhaps beyond what the market really wanted ... I don't know how they made out).
Anyway, I had a good realtor who knew the area well. Her marching orders were to find me something near X or with X characteristic (in the first case, a defined part of Coral Gables, say 20-30 blocks; in the second case a waterfront 1/1.5 condo near downtown Miami), and with the lowest cost per square foot relative to comparable sales. And I specified that when something popped up on the scope like that I wanted to see it right then, and get an offer in quickly.
Worked like a charm both times.
OK, here's one for ya.. Find REO properties in disrepair. Offer the bank 50 to 60% of their as is value depending on repairs needed. Get a HML to front the money + money needed for repairing. Accrue all payments until property is sold for RETAIL. This is the way to get the most money out of your investment. Don't work on tips flipping properties. An easier way to start is to find those properties that need minor rehad and cosmetic work, the kind any self respecting man can do and then RETAIL it, if you have the time to sit on it. Average listing in my neck of the woods is 90 days. Most HML will accure for 12 months. Don't forget to be creative with your math, if you are spending some time on a rehab, make sure you walk away with at least 25K otherwise, flip it to the wholesaler which you will learn and become savy at down the road.
I get mine at the court house, good luck