My offer was just accepted! - Posted by Carrie-PA

Real Estate Investing
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Posted by jim on October 01, 2003 at 09:45:09:

Most times the realtor will allow you to get into the property before you close. Get a hold of someone extremely knowledgeable on foundations, specifically a licensed foundation contractor, and take him through to look at it with you. You don’t have to tell the realtor that it is an inspection because it isn’t. You are just getting an opinion from a professional. If the licensed foundation contractor tells you it is o.k., then great, if he tells you it is terrible, then get out of the deal, or you will lose your butt. You will lose your earnest money, but that is worth it. Foundation problems are the worst and the most costly expense one will pay for rehab projects.

I have been a general contractor for over 10 years and if you are going to be rehabing homes, your contractors will make or break you. You must find a good one. I don’t know how big the house is, but I find it nearly impossible to completely gut the house down to it’s studs and replace eveything for only $15,000. I highly suggest that you don’t hire handymen to do your work, you will be so frusterated, the work will be average-poor, it will take 2-3 times as long to finish the project, and you will not be able to get top dollar for your house. Be very careful in who you hire and get everything in writing before work is started.

In my experience, the successful investors who rehab are those who have quality licensed contractors in there doing the work. Yeah, they may pay 10-20% more to have the job done, but you must figure that into your offers. The work is high quality and they get in and get out. Remember time is money, and the longer your money is tied up in a project, the more properties you are not able to get. There are some very good contractors out there that are very reasonable and if you can keep them busy year a round with your projects, they will be loyal to you. You must think of it as building a team. Find a good contractor and stick with him, if you go out and look for other bids from other contractors on every house, you are going to be in for a long road because there are more bad contractors than good.

Also, one of the best things you can do is educate yourself on all aspects of construction, from concrete to electrical, drywall, painting, etc. The more you know the better off you are going to be and you will know if a contractor is trying to take advantage of you. If you have any questions feel free to email me at jbronzie@yahoo.com.

Good Luck

jim

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My offer was just accepted! - Posted by Carrie-PA

Posted by Carrie-PA on September 30, 2003 at 16:10:16:

Hi,
I recently wrote a post about a house I looked at. Its ARV is at least 40k, they were asking 17,900, and it needed 10-15k of work. Well I made an offer of 11k cash and he accepted! His realtor called him and she said he was going to counter but she told him “this is a cash buyer!” so he finally said alright. I couldn’t believe it! Guess I shoulda offered less - but I don’t want to get a rep as making ridiculasly low offers all the time.

Anyway I have a quick question. Who do I go to to get insurance for this house and what kind of policy will I need to get. I will be rehabbing this house and it will be vacant. My carrier is State Farm but I heard the smaller companies are the ones who are more likely to insure a vacant building, am I right?

Also I didn’t ask her to put any contingency in the contract when I made the offer (we haven’t signed anything yet). Should I ask for an addendum to be put in that it is subject to a satisfactory inspection? I am thinking I should, though I know all that is wrong with it (alot). I am just worried that there might be something wrong with the foundation that I am to new to notice. There were no cracks or anything, but the basement was really wet, but they all are here in Franklin. Should I get an inspection done?

Thank you in advance! I am sure I will be on here alot in the next few months while I tackle my first rehab and I want everyone to know how much I appreciate their responses!

Sincerely,
Carrie
NW Peensylvania

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Re: My offer was just accepted! - Posted by B.L.Renfrow

Posted by B.L.Renfrow on October 01, 2003 at 02:20:27:

In my area State Farm will not insure a vacant house, which I think is typical natiowide. You need a “builder’s risk” policy. Other investors here have recommended Zurich insurance, or you could check with some independent agents in your area.

As for trying to change the contract after your offer was accepted, I wouldn’t recommend it. If you try this, the seller and agent(s) will likely dismiss you as a newbie without the ability to close and will look for a real buyer instead. If you wanted to include an inspection contingency, it should have been included before the buyer accepted your offer.

I am no rehabber, but I’d think for $15k you could almost gut and replace everything down to the studs if you had to. In a low-end property, using economical supplies and handymen/contractors (NOT the guys with the full page yellow pages ad driving brand new pickups), you should be able to do a significant amount of rehabbing for that money.

If it ends up costing you more than you planned, you’ll have learned a valuable lesson for next time.

Brian (NY)

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Re: My offer was just accepted! - Posted by Heather -Tx

Posted by Heather -Tx on September 30, 2003 at 17:32:18:

Congrats!! And you’re Off!! :slight_smile: I haven’t had luck with any of my offers through the MLS yet, but one day that too will come… until then I’ll just have to keep taking calls from my advertising.

Again, congrats!

Heather Zaal

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Re: My offer was just accepted! - Posted by wpage

Posted by wpage on September 30, 2003 at 17:16:44:

Carrie If your offer was a written one and it has been accepted by the seller I doubt that you can go back and insert a clause for inspection. If it were a verbal offer that you made and was accepted verbally, on price alone, then I guess you can put in the written offer anything you want but it doesn’t mean that the seller will accept. However, in any case it does not mean that you cannot do an inspection of the property. Get someone knowledgeable then ask the agent to let you visit. Unfortunately it may not change the outcome. Boy do I wish I could find homes for $11,000. again in my area. I haven’t seen prices like that since the 70’s. good luck wpage