? for experienced flippers/"prehabbing" - Posted by Brandon Treat

Posted by Ron (MD) on July 30, 2001 at 12:02:20:

Brandon,

I’m a rehabber and most of the houses I buy are REOs that have been cleaned out. I have to admit, I don’t like to look at houses with a lot of stuff in them…although it should be irrelevant, since I have a pretty good idea what it costs to clean a place out.

When I do buy a house with stuff in it, the last thing I want to do is try to salvage some of it for myself or anyone else. A few times I’ve told a worker that a particular house is going to be cleaned out tomorrow, if you want to look it over for anything you might want, you better get over there today.

So, I think it probably is a good idea to pull out trash…especially if there’s a lot of it. You might spend a few hundred dollars to do this, and it might help sell the place faster. I don’t think you’re going to raise the price by thousands by pulling out trash, but you might avoid turning off a delicate buyer (like me).

I would advise against doing any other repairs, etc. in preparation for a rehabber. I know what repairs cost and I can get them done myself. You’d be wasting money to do something like slap on a coat of paint to brighten up the place…I’m going to paint it anyway (over your paint).

Ron Guy

? for experienced flippers/“prehabbing” - Posted by Brandon Treat

Posted by Brandon Treat on July 30, 2001 at 11:18:06:

I’m just curious, wanting some advice from some folks who have some flipping experience under their belts.

I’ve read Joe Kaisers’ article on “prehabbing”, wherein your primary goal is to clear out the junk, and make it as base level clean in as easy a fashion as you can to maximize your time. What I’m wondering is, in a house with a bunch of old furniture, a mirror on the living room wall, random chairs around the place, I’m talking about things that could possibly be used by someone else, though they aren’t brand new or beautiful, in the experience of some of you more experienced folks, do you try leaving this stuff there and trying to use it to help encourage the rehabber/investor that they have a good deal on their hands? Or would you just junk it all or keep it yourself?

Also, in the experience of all you ingenious people who frequent this site, what have you found to be the most important and effective things you can do to a house to maximize its profitability and sellability when wholesaling/flipping?

Thank ye kind folk,

Brandon Treat
KRONO

One more idea - Posted by J. CA

Posted by J. CA on July 30, 2001 at 18:21:20:

As an extension to a couple of the ideas already offered. You might want to mention to all your ‘estate sale’ browsers, that the house is for sale (if you plan on retailing it to a handyman.) One of them may be interested, or may know someone who is. You might not find a buyer, but it couldn’t hurt.

clear it out/sell it? - Posted by Jim FL

Posted by Jim FL on July 30, 2001 at 18:09:10:

Brandon,
Since you are fairly new to this business, young , and should have more energy and time than most, do as was suggested and remove the junk.
But, before you do, take an hour or so and clean up the stuff a bit.
Then hold an “Estate sale” as was mentioned.
I had one in a house, we did it for two days.
First day, we priced everything, and sold most of it for the prices we set.
The secind day I made a little sign that said, "LAST DAY OF SALE, EVERYTHING MUST GO! Make an offer!"
We made about $4k from that sale, and got the house cleared out over a weekend.
There were a couple of smaller items left, and we just donated those to the salvation army for a tax write off.
Since then however, I don’t have the time or energy to do the sale things, so we just hire someone local to haul it all away for us.
And sometimes you will find something of value to keep for yourself.
I have a nice collection of crystal from one home, and some playstation games for my kids, from some houses.
Also, if there are appliances, and they are clean and work, you may be able to sell those as well.
A rehabber will not really care whether or not the home has them, so you may as well sell them for something.
I used to keep all the extra appliances I got and sold them all “Rent to own” to my tenant/buyers in other L/O deals, to increase cash flow.
Sometimes selling them appliances that I’d gotten out of the very same home they were renting from me.

Good luck and HTH,
Jim FL

A little trick, maybe… - Posted by JT - IN (St. Barth, FWI)

Posted by JT - IN (St. Barth, FWI) on July 30, 2001 at 16:03:28:

Brandon:

I 2nd, (or 5th), what has been said to this point, about removing the junk. When I look at a property that is junk filled, it is a direct expense to me to remove refuse and old furnishings, so I deduct that directly from what I can offer, and I am very liberal with the amount of time and cost of removal. If you have the time, and manpower, you could probably do this less expensively, and possibly netting you a higher offer, in the case where the proeprty is disposed of, vs. me, (or others), having to do so.

One trick that I have learned, in removing refuse, is rather than getting roll-off dumpsters, if you have lots of trash, it is better to get the trash truck, (rear-load), to come on site and sit while you load the goodies and the garbage. I have had homes that would have taken 5 or more roll-offs, at a cost of $ 375. ea, and used a trash truck, for 2 hrs, at a cost of $ 150 per hr. Big sabvings here, if you have a lot of trash to remove. Thsi is called Point-to-Point, where I am located, and should be available in most places. It has saved me thousands of buckeroos in the last couple of years.

Just the way that I view things…

JT - IN (from St. Barth, FWI)

just few thoughts - Posted by Ann

Posted by Ann on July 30, 2001 at 14:48:39:

In cities where there is a Habitat General Store, Habitat for Humanity provides free pickup, of re-usable items, as does Salvation Army. In some locations there is also Viet Nam Vets organization who do free pickup.

Don’t know if auctioneers pick up
free or not. I’ve been to some on-site auctions that are arranged to move everything: For example “everything on the table” bid as a unit, could include a box of office supplies, a spare range hood, and bicycle wheel. I think they arrange it first to move the junk with the good stuff.
Up to the successful bidder to haul it all off. Everything goes,
including the potting soil in the barn, the half used bottles of
detergent…the works. Haven’t done this personally. Auction house runs the ad; attracts neighbors, and people who resell at flea markets. Somebody’s bound to ask about the house.

I imagine one would chose the method that could get the clean-out
accomplished by earliest date, or whatever your needs are.
Hope this helps.

There’s money in this (long)… - Posted by Matt

Posted by Matt on July 30, 2001 at 14:26:08:

Brandon,
Finally I find something on this board I have experience in. To answer your question, get the stuff out and hold an “estate” sale. I haven’t made my first RE deal yet, but I have helped a lot of friends who do rehab, and that “junk” you’re cleaning out is often a goldmine in disguise.

Here’s my experience:
Two of my friends bought a house from a family that had just lost a relative (the owner of the house) to rehab and sell for a quick profit. The house needed mostly cosmetic work, but it was full of old furniture, clothes, stuff. I asked the family if they wanted anything, and they took a box of old photographs and some old records, but told us to do whatever we wanted with the rest (in the purchae contract they actually stated that everything in the house was sold with it to my friends). My friends offered me $200 to clean the house out completely. I took their offer, and started packing all the stuff into a truck to stick it in a rented storage locker, planning to go through it and see if there was anything worth saving. As I was in the process of cleaning out the house, a realtor (neighbor of the man that had passed away) asked what I was doing with the stuff. I told her and she offered to organize an estate sale for me. We agreed on terms of her office getting 25% of the money made, and she went to work.

Apparently, most larger realty offices have someone who does this on a regular basis. This woman took three weeks going through everything and cataloging it and finding values. She did the advertising and even had two assistants work the “sale” with her and I. Over a weekend we had about 45 people show up at the locker to pick through the stuff. Grand total: sold most of the items for a total of $3460. That turned into a profit for me of around $2700 after taking out the cost of the storage locker and adding in the $200 my friends paid me to clean house. Long story short, I got lucky because this lady knew what she was doing (I probably wouldn’t have known that a dirty old pocketwatch we found was worth $600). If you have more than just a few things to clean out, talk to a realtor about hosting an estate sale right at the property for you. Also, you might want to negotiate better terms than 25%, I found out later that I kind of got screwed on that, but didn’t mind so much because I had a few more bucks than I started with.

Hope this helps,
Matt

Clean out the junk… - Posted by Tim (Atlanta)

Posted by Tim (Atlanta) on July 30, 2001 at 12:57:17:

Clean out the junk. You want to give the rehabber a look a the place and it’s potential. Not many potential buyers will care if you have 2 dining room chairs or a spare lounger. Just clear it away so that the room’s full size can be adequately judged. I have also seen furniture strategically placed to hide certain defects, so I prefer to see a place empty. Donate any furniture that you think would be usable to your favorite charitable organization.