Thread: TMG - Real Estate Information

I am yet again a new member of the forum....came because of the World's Most Beautiful GARAGES & Exotics thread, but joined because of your Properties section.

I've been around here for the past few years, just poking in and out every once in a while - checking out the threads. I won't contribute to anything I don't know about, and houses is what I know.

I'm 31 and have bought lots of real estate over the past 10 years. I've done good/bad/ugly all at the same time. Sugar-coating is not something I'm good at, so I just tell it like it should be: Straight and to the point.


Anyone who has questions about property investments or rehabs or trusts for property (even cars/boats/etc), just post below and I'll try and answer any questions you have. I won't lie, I buy really CHEAP properties because that's my market and I know it well. Please don't ask me on suggestions to sell a certain property for, I don't know - your market is much different than mine.

As far as rehabbing goes, I can tell you how to do it three ways: Best ($$$), Good ($$), Renter-Style ($).
As a rule of thumb, if you spend 30k+ on a rehab, you better be getting new windows, flooring, wiring, furnace/AC, plumbing....basically everything.
I have many contacts in California, NJ, Texas, and California for just about everything - title companies, broker houses, investors. If you need some help, I'll send you to them.

Rental agreements, trusts, etc, are available too. I won't lie, this forum is one of the many I do 'drive-bys' on, but one of the most closely knit communities too. It is unlike most of them and for that, my documents/thoughts/opinions are available to the older members.
*Oh, and I am not an atty, or professional, so don't take my advice as law. You should seek a professional blah, blah blah. <---that always needs to be in there I suppose.

So, my opinion, and expertise in some areas, awaits you. I want to help answer the easy questions and give you hope on the tough ones and like to see others join in - I don't have all the answers, but damn near close.

TMG - James

Welcome to the 4...

I have a question for you.

When deciding on a residential property to flip, what are your primary credentials the home must have? Cookie cutter 3/2/2? % below market value? Unfinancable ? Turn over and what is moving in that area?

Where do you spend most of your time and money in rehab? BR + Kitchen? Curb Appeal?

Originally Posted by marcrenonv

Welcome to the 4...

I have a question for you.

When deciding on a residential property to flip, what are your primary credentials the home must have? Cookie cutter 3/2/2? % below market value? Unfinancable ? Turn over and what is moving in that area?

Where do you spend most of your time and money in rehab? BR + Kitchen? Curb Appeal?

Marcrenonv,

First, let me start by saying you begin at your sell price. Now, we move on and come back to this later.

As a rule 'bread and butter' is a bare minimum of at least 3/2/2 for middle income areas. Never get a 2 bed. Ever....to resell...ok, sometimes. Rule of thumb
for undervalue: 70%...some markets, 55-65 below market in others. Many places are still dropping in prices though.
Remember that we have not hit 50% of the foreclosures yet.....that means prices are going to continue to fall - 10-20% more (and not everywhere).
If you can work through and find the deals, cash is king. Make an offer (lowball) with a certified check. Demand a close within 14 days (or end of month).

Women buy houses.....they want wide open kitchens/baths. Knock down walls (leave support....or you might get a skylight you were not planning for) and open up kitchens if you can. Install granite/Corian/Marble - for newer kitchens. Get a TON of estimates as prices will vary greatly. For older kitchens, normal countertops are fine.
Anything new makes a place look great.
Paint everything with a fresh coat.
You shouldn't buy a house if you and your friends are not 'drawn' to it from the outside. Landscaping helps a lot, but a house either has 'IT' or it doesn't. Landscaping can run you up to 5k. Back yard is important too, but simple is better.
Bathroom, simple rule is better too. Ceramic tile is very cheap at Home Depot/Menards/Lowes. If it is small bath, put pedestal sink in. New larger sink - 400 bucks.

Most of these are decent enough remodels and not too expensive.
Kitchen and Bath Remodels

If houses are selling in a particular area, you want to focus on houses there. There's a reason they are selling. Get the old listings with pictures and info. Have a woman look over everything too.....they don't think like us men, so they will figure out 'why' houses are selling faster than us - if it's not immediately available.

Sales Price:
This is where EVERYTHING starts. Even offering on the property to buy. What can you sell for realistically? If houses are selling for 220k, you should be buying for 165k....wait for it.......rehab included.

Here's the cold hard numbers.
220k sales price, minus
- 7% realtors commission (bastards)(-15k); minus
- 10% sales price (houses sell for 5-10% below asking and you will too....) (-20k);
- 10% profit (-20k)(roughly);
-------------------------
$165,000

Guess what happens when the market suddenly starts to fall again....even if only for a few months? Yup, you're looking at another 5% off your profit.
Don't forget to include taxes and insurance per month. How much do they add up to? Most likely, 2k-3k. Rehab time: 2 months (for you, not me). Sell time: 6 months, less if you're lucky.

If it were me, I'd buy much cheaper and you should be able to. These numbers/percentages work for just about everywhere for middle America areas.
Worse case everything. If you had to rent it, could you make your monthly expenses while renting? it's just a thought.

What are houses in your area going for on average?

Median home prices in my area are between 170-180k.

How do you deal with competition? Many first time home buyers and people bidding on the property with emotions and not numbers in mind. This competition then in turn drives the home and offer prices up signficantly. Making it no longer a 'good' deal.

Would love to discuss this more with you if you have time.