The Ten Commandments of the Flip: 1. "Camps" inspection according to ARV of properties of the same size, and located…
The Ten Commandments of the Flip:
1. "Camps" inspection according to ARV of properties of the same size, and located within a small radius of the property being purchased.
2. If you have received financing (an investor and / or loan) the amount you have received will not exceed 70% of the ARV amount.
3. It is always advisable to talk to brokers whose area of expertise is in the specific area where you perform the flip.
4. In light of the fact that the real estate field in the United States is dynamic, it is not worth relying on the prices of six months ago, but of the last two or three months.
5. Require a detailed quote from the contractor and this is to a. That the renovation price should not exceed the original bids. B. If you take HARD MONEY funding, they will need to get a complete breakdown of the renovation.
6. For the price the contractor demanded, you will add 20% of the deviation from the original plan.
7. It is important to ask the contracting contractor how many properties he did in the specific area and when? This is because an experienced contractor in the specific area knew what the level of finish of the property should be.
8. If you purchased a property for the “Mixed Seller” flip, make sure that the “Assay Fay” assignment does not exceed 15% of the original contract amount.
9. It is desirable that the property be under LLC to avoid personal claims.
10. * Do not purchase a property without title insurance *. (I hope for most of you this is pretty clear but, I have already met two Israelis who found "great" deals and gave up Teitel).
I would love to hear comments and illuminations ..
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Thanks so much for sharing. I would love to understand the section 8 in depth.
Thanks, interesting post
Thanks for the post.
I would love to give feedback and line of thought;
1. The properties should be comparable, i.e. comparing apples to apples:
Size up to 15% above or below the property size
Location, up to half a mile from the property (depending on the city and the density of the property), with emphasis on:
The same thing
Micro location
Same regional school
Usually not across the main road although the matter requires examination
Same type of structure
Same number of floors
As many rooms as possible (as well as toilets)
The renovation level should be the same as the price you want to sell
Additionally:
I would check what is on sale in the market and at what level of finish.
Also, DOM - Days on market of the assets sold.
2. I'm not sure this section works in some cases.
For example: Investing there 100% of the investment amount, I manage all the operation from start to finish, and our profit share is 50%.
Still, the investor can get high returns on cash on his investment.
Also, most HML - Hard money Lenders will not give a loan of over 70% of LTV or LTC. Depends on the attendant and the micro area.
5. I prefer to receive at least 2 bids from various contractors not recommended by the broker.
Also, if the percentage difference between contractor bids is higher than 15%, I would take a third bid from another contractor to be sure.
7. True, though, what you might want to do is consult more with realtors who sell in the neighborhood and on the specific street. They are the ones who come in with customers and hear the opinions of potential buyers. They are the realtors who get feedback and know what is being sold in the neighborhood and what customers are looking for. Furthermore, many of the brokers at the end of the tour ask their customers to fill out a feedback page about the tour in which they are impressed with the price, quality, area, etc.
8. Personal story:
I purchased a property at 80K $ (after the Holsler bought it at 40K $. The shipments were about 70K $. The property was sold at 230K $).
I have often paid a commission to Holsler that comes to about 50% of the price offered to me. In my opinion, as long as my numbers are good and undergo several tests, I will wholeheartedly ask the professional who managed to get an excellent price on the property.
9. Agree, the LLC Holder is protected by indemnification of the value of the property held by the LLC. Notwithstanding the foregoing, a situation may arise in which the court will raise a screen in certain cases and allow the holder of the LLC's assets.
Hi Moses, regarding 8 Why do you care how much the wholesaler earns as long as the final amount you pay meets your criteria for a deal?