Posted by SusanL.–FL on September 20, 2000 at 14:38:33:
Hi Sam,
There are quite a few posters from Florida on the CRE board. Maybe someone from your immediate area will respond to your post.
Good luck!!
Susan
Bradenton
I need some input please - Posted by Sam Riccobono
Posted by Sam Riccobono on September 20, 2000 at 01:00:01:
Hello,
I found this website a few days ago and have been stuck to glue to it ever since. I am even thinking of ordering a course also. Here’s what I am thinking of doing. I am skilled in many areas of home building, remodeling, repair. I have owned my own home remodeling company for many years and have many contacts in the industry, along with a couple of very good workers. I have been thinking of, and have had the urge for a while, to purchase homes for well below market value, whether pre foreclosures, foreclosures, HUD auctions, etc. I would then repair/renovate the homes as quickly as possible then resell them at their market value.
I have read many articles on this site in the last couple of days claiming for instance that I could go to a HUD auction, purchase a house for 30%, 40% or even 50% below market value, obtain financing from a private invester, then complete the required repairs then resell the home and make a very decent profit. This is certainly what I would like to do. Articles seem to give the impression that this is all a piece of cake to do. I would like to know exactly what is involved in doing the above. I don’t want to give the impression that this needs to be an easy proposition, I know that nothing in life comes easy and am willing to put whatever it takes into making it a successefull venture. But is what I want to do worth my time and effort? If I invested the majority of my time into this type of investing, Can I make a good deal of money doing so? To be honest, I have a bit of concern about buying a home or homes, repairing them then putting them on the market and not selling them!
Any advice/info would be greatly appreciated.
Thanks
Sam Riccobono
Re: I need some input please - Posted by JPiper
Posted by JPiper on September 20, 2000 at 06:13:11:
Sam:
I think one of the secret desires inside every contractor’s heart is to buy a house, fix it up, and make that big pot of gold at the end. Matter of fact, there are alot of them doing just that in today’s market. I’ve sold some houses to contractors to help them along.
But make no mistake. It’s not an easy business. If you’ve been a contractor for a while then you know how difficult it is to get quality help. I don’t need to tell you about that. Suffice it to say that the good guys are all working for top dollar…which leaves the less reliable/incompetent in the pool. This is what I call the “contractor factor”…and it has the potential to bring down the best of projects. It’s an ongoing and never-ending problem for me…and I suspect for others.
But let’s assume that you have this “contractor factor” under control. Understand that this is just one element of the rehab business. The other elements have to do with locating the property, negotiating a worthwhile deal upfront, financing the deal, completely the work on a timely basis, and then reselling at a level that puts sufficient money in your pocket to have compensated you for the time and risk involved. The fact that you’ve developed your expertise in the contracting business won’t have prepared you in some of these other areas…all of which are important…and therefore you will need to educate yourself. Looks like you’re doing that.
For example, in my area HUD properties aren’t much of a source for good deals. Therefore, you’re going to have to beat the bushes to locate those properties…and there will be plenty of competition looking along with you.
Financing through private sources is a good idea. But you’re going to have to locate those sources willing to finance you…and when you do it will probably be expensive. Bank financing via credit lines is something that you may be able to develop, but it will take good credit and a workable plan…and probably a history of having already implemented a plan successfully.
Selling the property is another area of expertise that is vital to your success. Hiring a Realtor as an example is one way to go…but it costs 6-7%, and it may take a while…thus adding to your carrying costs. Or you can sell yourself…meaning you need to develop your own expertise on sales, and methods of finance for your buyers.
There can be a great payoff at the end of the day for a successful rehabber. But nothing in the process is easy. One good book out there that I would suggest is by Kevin Myers called Buy It, Fix It, Sell It, Profit…available at Amazon for about $15.
JPiper
As a General Contractor for nearly 20 years, … - Posted by Rick Wheat
Posted by Rick Wheat on September 20, 2000 at 05:18:30:
and an Investor now for 8 years, I had the same thoughts you are having. The contracting business is very gruelling, and can be hazardous to your health, both physically and mentally. That’s why I got into the investing business, I saw my clients making killer bucks on the properties they were having me work on.
Yes, you can make a TON of money rehabbing houses, but there are things that you need to revise your thought process about when you do.
For instance, the estimating on the rehabs should come easily to you, but you need to keep in mind that you are going to be selling the property FOR A PROFIT, so you don’t need to overspend on the work done. You also need to acquire a good feel for the market, in order to determine a good deal when you see one.
Check out some of the courses available. I’ve bought several myself, and can recommend some if you’d like.
GOOD LUCK!!!
Rick Wheat
Re: I need some input please - Posted by Ken (ILL)
Posted by Ken (ILL) on September 20, 2000 at 05:06:31:
One way to do this is to find yourself a wholesaler that has had some training. They usually know the bidding process. They will sell you the home for a low price. This price SHOULD have a fairly reasonable margain in it for you, AFTER repairs.
You didn’t tell us what area you live in, so that someone near you can contact you.
Re: I need some input please - Posted by Sam Riccobono
Posted by Sam Riccobono on September 20, 2000 at 12:18:09:
Thanks J for your response and advise, I am going to purchase a course, not sure which one yet. I am also going to buy some books, including the one you recommended. I am actually happy to hear it will not be easy because I believe nothing good in life comes easy. Thanks again for your help.
Sam R.
Re: As a General Contractor for nearly 20, … - Posted by Sam Riccobono
Posted by Sam Riccobono on September 20, 2000 at 13:05:07:
Thanks for the advice Rick. I have plenty of experience on rehab estimating, but I certainly see your point on changing my thought process as far as spending goes. Any courses that you can recommend to me would be greatly appreciated.
thanks,
Sam R.
Re: I need some input please - Posted by Sam Riccobono
Posted by Sam Riccobono on September 20, 2000 at 12:09:27:
Hi Ken,
I live in Cape Coral, in SW Florida. How would I go about finding a wholesaler?
Thanks
Sam Riccobono