The story behind how you found your flip house would be interesting. I know of several avenues but I hear of the super discounted houses and would love to hear how those are acquired. Some people have the knack for it, I want the knack for it. Anybody got any good stories?
.
.
.
Nobody is as good as they seem, nobody is as bad as they seem either.
Replies
It really is a moving target and depends on your area. Most recently in my area there have been more forclosures than investors and the banks always bid what they are owed so the deal around here lately is to wait 6 months after the forclosure sale and make an offer to the bank. Damaged property is the better deal of course because the bank doesn't want to repair it.
In the mid 80's again in my area the rental market was in the toilet and buying from rental investors was the hot ticket for the best deals. Some forclosure activity was around too. 90's buying from individuals was the only way as the market was hot and most anything would sell so if you could find someone in trouble that was the way to go. It simply changes and is regional. DanT
"It simply changes and is regional. DanT"
There was a guy that was on vaccation here that was fishing our lake . After about a week he said theres a lot of water in that lake but theres only fish in very small parts of it that I can catch at least . I just learned that from the weeks trip and now today they arent there . I guess if I had another week,.. and he loaded his boat.
I think about that story when I think about what you mentioned.
Tim
Tim! Glad to see you posting. I was a tad worried.
jim
fka (formerly known as) blue eyed devil
Thanks , Ill answer you both next post.
Tim
Well do it on this thread, I've been curious too.
Doug
Edited 10/21/2007 8:38 pm ET by DougU
Hi Doug ! I did it . <G>
Tim
Shortens screw off time for one , lol.
Tim
You must have been right behind me!
As for the highlighted quote, I dont work Fridays, well not at the shop but man I love those days when the wife is at work and the kid is at school and I can screw off all day long and then make up some excuse for why nothing got done! I dont know if I could work with my wife, love her but........ God bless ya for that.
Glad to see you back on here. Thought maybe you were spending all your time in the Tavern talking politics! :)
Doug
Well, shes a getter done attitude gurl. Reminds me a lot of Shred . I hit Shred on the button describing her once on here and she was so floored she never asked how I did it . Its because I live with one like her. Ive never seen someone handle so many things in a day mentally. Shes also been a boss for almost 25 years .
Unless a guy has worked and lived with their mate and has had freedom of self employment , Im here to say its a big change . Ill have to say though shes great at it . Its me thats not doing so well, <G> . Ill get used to it I guess .
Tim
Where you been buddy? I just got in tonight from Mississippi and Louisiana. Warm, great food and scenery. Everyone sounded like you lol. DanT
Whatta mean everyone sounded like me ? <G>
Ive been sick for quite some time and things change as we were talking about .
Robbi quit her job and is doing mine plus taking care of me .
Im going to work with her or she with me and we are working on our stuff . Im able to work part of the day now so Im doing better.
We had our 16th ann last Friday and she lacked a few months having 25 years in running that plant . Big change for her as well.
She watches flip shows and all the others that surround our trade trying to learn stuff she says I dont tell her . She wants to flip on her own and the jury is still out on that one . I think I can still do it . She says no.
So anyway the rentals and the flips are the sole suppport right now .
She did get an insurance license and is planning on selling it but her heart seems to be wih this business ,hmm.
Is a different life spending full time with a mate . I never did that before . Shortens screw off time for one , lol.
Tim
Wow, big changes for all! Hope your health is coming back around. More of the same?
I have my last 4 on the market. I simply can't run both and the new bride runs the local fairground and has the same time issues. Good business, good run. Time to do something else.
I really hope all is well. If I can do anything let me know. DanT
Good friend of mine had to put his Dad in the nursing home, Medicaid deal. He told me that Medicaid would only allow him to keep $ 25,000 from the sale of his home. Nice brick three bedroom, sunroom, new paint on exterior, just needed a little spiffing up.
My buddy said he could paint every room, put down new flooring, refinish the hardwood, sell it for $100,000, and his Dad would get $ 25,000. Or he could sell it as is for the tax appraisal value, and his Dad would get $ 25,000.
So why bother with the work. He offered it to me, and I had it sold before I cloased on it. 60 days, I cleared a little over $ 12,000. He couldn't flip it himself because the Gov't would examine the sale. It had to be a fair market transaction with an uninvolved party.
I'll never step into one like that again, but I guess it's a niche.
Greg
Anybody else?
.
.
.
I've got one that I rent - I'll probably flip it when the current renters move - that I found when I was trying to buy one across the street. Had an offer in waiting on the home inspection. The place smelled like smoke, but the tenants were heavy smokers. Inspection turned up major fire damge to one outside wall that had not been repaired, just drywalled over and some rafter damage.
Backed out of the deal and took one last drive by. As I drove by, the guy across the street was banging a "For Sale" sign in his yard. The nicest house on the street. Stopped and asked what he was asking, made him an offer, and he took it. Badabing. Right place, right time.http://grantlogan.net/
I was born in a crossfire hurricane..........shooby dooby do
I have one for sale right now. It was my mothers' bought new in 1960 in COsta Mesa CA.
I spent the last 10 days in CA hating it and listed it with a local broker. About $100K under market I think, I'll see what happens.
Local sales are $380 to $460 sq foot.
Joe H
The story of my last flip.
Start in 2002. We (me & ex business partner) finished our first flip. I decide to call the paper. We get the cover of the Sunday edition Real Estate page along with our phone numbers.
A year and a half later the partnership dissolves (thank God!) and he changes his phone number.
Fast forward to 2004. I get a call from a lady in Alpena (about 4 hours away). Seems mom just died and she saw my number and article in the paper and wanted to know if I want to buy the house.
Her son meets me at the house and makes the mistake of saying "Uncle Joe wouldnt give us 37500 for the place". So, a phone call later and i'm buying a house for 37500.
We put 70k into the house and walked away 5 mos later with 35k in hand.
While all of this was going on, the neighbor had a vacant lot for sale for 39k.
I'd say I did okay. Funny how things come to ya when you're not loooking for them.
I believe that making yourself available for a deal--open to it-- might be a decent part of it.Thank you all for sharing, I am sure there are many more and I for one, do enjoy reading about them. It is making me more aware of what could be out there.
.
.Nobody is as good as they seem, nobody is as bad as they seem either.
I have messed with real estate for 25 years now. All kinds of economies and all kinds of markets. With a little education of what things sell for in your given area you will find there is always a deal somewhere. I have always been able to buy something within 60 days of looking. Really looking. And my area is small. A town of about 40k. So larger areas I am sure are easier. DanT
MSA1,
It amazes me that once you start looking, things tend to land in your lap. Just word of mouth sends a lot of properties in my direction, before they go to a real estate agent. And even agents call, as soon as it's listed.
Not only that, but you tend to look at properties differently. You can sum them up in just a few minutes. Land? Subdivide, flip, rent, etc. I'm new at this but, am starting to love it.
northeastvt
I agree. I'm having a ball doing this. I started relatively late, I was 31 when I started contracting and bought my first investment property.
I know what you mean about looking at property differently. I dont think any house a must have. There's always a better deal around the corner especially right now.
I find my flips a number of ways.
I know a lot a real estate agents and they all have my card (hence I get about a call a day with a "great deal!!!"). I tell them if they hear of something that could be sold fixed for under $100,000 or rented out with a cap rate of 9 or up to call me.
I know the foreclosure personal at most of the local banks and tell them the same kind of thing. One guy has given my name to several people who have gotten in trouble and expressed to him that they wanted out however they could. This sometimes works out well for all involved, old owner is not foreclosed on, bank does not have to go through the PITA of foreclosure and I get a house for cheap.
Neighbors have come to me when I am working on a house flip and told me stories of the woes of Bertha down the street. I contact the owner, "So and so down the street said that you were having some trouble, and were moving in with your kids, have you ever thought about selling your house?
If I am feeling ballsy or hungry, I drive around neighborhoods looking for abandoned houses or ones in severe disrepair. I research tax records to find the owner and then send them a letter with a picture of the house in the worse light I can put it in and say that I am looking for a house in the neighborhood. I get told to F off a bit, sometimes I never hear back and a few have turned into deals.
When you have as many feelers out there as I do, you get a lot of BS from the pros (banks, agents) so you need a good ear and feel for the things. This is gained by time and exposure. When I get a call from a pro I ask for a two minute run down with just the facts. WHERE is it, WHAT condition is it in, WHO is selling it (a person, a bank) and objectively HOW much do you think a similar home in good condition is selling for? (The first two are the most important.) I tell a lot of people to call me when it gets cheaper, and sometimes I go take a look.
The key to this type of thing is to be ready to pounce when one you want comes your way which means a bank who knows you and is willing to process a small loan quickly sometimes and willingness to be flexible in how the deal is done. I have paid an agents commission as a buyer so the seller could pay off his loan and be out, I hired a moving company once, I have let sellers occupy a home for several days after closing, I have closed quickly several times (3 or 4 days and once 5 hours), and I have even used my Discover card to cash advance the purchase of a house once once (the 5 hour closing for a $10K teardown house).
I generally hold a property 60 to 90 days before marketing and have held up to 6 at one time and sometimes (like right now) I hold none. I look for the right conditions to be fulfilled and don't always snap up a deal when I find one. My number one rule is to always treat it like a business (because it is), know when to hold'em and know when to fold'em as the saying goes. I have made good money on some and lost money on others. This subprime mortgage thing is killing me right now because fact of the matter is a large number of people who where buying in the price range I work in where getting subprime loans and now the buyers are drying up.
Edited 10/18/2007 1:37 am ET by restorationday
most of the really good buys i have ever came across were word of mouth.once a re agent heres about one,there buyers or there bil's are.let people know your a buyer and you will do what you say and be ready to pull the trigger in a week if need be. this means having funds avail. before you find a bargain. home equity line of credit made me more money than any other loan i ever had.if i wasn't using it,didn't cost nothing.but i could shoot my mouth off and back it up with the line credit.
heres some ideas: estate house's,these are my favorites,old people will spend money like crazy to make sure the mechanicals are good.but that gold shag fom 1971 is still great carpet.so there ugly but solid homes. when you look at one ask how many people are involved in the sale and who has to approve the offer. make a low cash offer,close in 7 days.if they are motivated you bought a house.
oldfoggy landlords like me,we've owned these things for along time,were sick of them and who cares what we sell it for,uncle sam gets 30% of every dollar. make a crazy low offer and throw in some incentive like you have a 2 year old bass boat at home you would sell him for 10.00 at closing! watch his intrest perk up.[i like old cars so make me a offer with a 69 mach 1 and you own it].it's not included in the sale,but if he will make you a good deal you will return the favor.i've never done this but i have a friend that will buy a 100k house for 50k with some 25k toy thrown in.one time he told the guy to go pick out a new truck and he would drive it to closing. he's sure he wouldn't like it and would sell it to him for 100.00!!!!just stand around and bs for a while and see where his intrest lie and go from there.
i just found myself in a situation that looking from the other side could snag you a bargain. have rental,husband shoots wife,house was worth 70+,i put the word out i'd take 45.i would not of been offended if my phone had rang [in fact it would of made my day]and said they saw this had happened ,would i sell.to tell you the truth for the first 2 weeks if you would of offered me20k and that old car we would of had a deal.[now i'm in there working on it and grumbling the whole time]. so this might be a avenue worth pursuing also.
repoes,what a waste of time,tore up, abused ,owes more than they are worth and the bank wants to recover all there money they loaned on a 97% loan before it was tore up. now if they get a huge reo like some other areas that may change,be ready to go if it does.
last i will say that flipping here in the midwest is tough.100k house say you buy at 50% of market [and those are few and far between] spend 20k cleaning and fixing ,pay holding and closing cost and a real estate agent,you need to plan on selling a little under the market. so what started out as a bargain may make you 10-15k in profit.
have fun,you can never buy to cheap. larry
if a man speaks in the forest,and there's not a woman to hear him,is he still wrong?
Good post Larry.
fka (formerly known as) blue
These are really good. Thank you and please keep them coming. If anyone has anything to add, please do so, you never know when your information might be just the thing to inspire someone.
.
.
.
What DanT said was the most imformative to start . Someone saying that repos dont work [and another] REA s do, sure dont know my area.
First , you have to know the market you are working . That can change just one town down the road and often does more than you might expect.
I read the paper every morning and listen to local news making notes. The other morning I learned of a new plant opening in a small town that has never had a heavy work source. The town will have to grow by 500 families within the next year . Its size is 6,000 folks. Im familiar with this small town and most of it is old buildings showing no new growth in years and years other that the quick pics. Tha town will have small but solid growth for the next 5 years.
Thats the type of imformation you get and its up to you to maximize potential. A small builder could build 5 houses per year for the next 5 years or you could take advantage of a small towns zonning [normally none] and hit pay dirt hard filling resdential areas with apartments before they shut it down.
However thats just one instance for one town . It wouldnt work in my town. I could work that town easily enough from 40 miles away. I would first hit the flip market by the normal means of internet , banks , and the local papers . Every goverment forclousure is available on the net every single day. Auctions are daily somewhere .
This is a big enough business these days for a firm working full time. Hours of net use and phone work means a lot of office time . Then theres hours and hours to the inspections in the field.
Theres always the thought you might find a dead body in one of those old dumps . If you always liked hitchcock movies you will like that part of the work.
The drive/bys are an old principle that has fallen with gold shag carpet. It is nice to drive around and necesary to know the market but drive/bys are common to watching church yard mold grow. But , on the other hand if you live in a small town and know everyone then you would know when anyone moves . That would be a good part time venture.
Tim
I said RE Agents work but I guess I need to qualify that. I buy and sell on average 12 houses a year and only maybe 3 or 4 actually come from leads from agents. Like I said, I get a lot of BS from agents but they do sometimes run into good deals. Some people who decide they want to unload a property will just walk in to or call one of the big offices in town and say they would like to sell their property ASAP and sometimes they get real cheap. It sounds strange but it does happen. I got a house last year where a woman had died and her only son had gotten the house. He did not live in the area and had no interest in maintaining the house at all. The place had sat empty for about 5 months when he got a hair up his butt to get rid of it. He called local Re/Max office and the agent on floor duty talked to him a bit, then went and looked at the house and told him she would list it at $65,000. He told her he wanted to get rid of it and to list it for $45,000. She called me as soon as she hung up the phone and we met and I went through the place quickly. 1200 sqft bungalow near a college with orange shag carpet, ugly cabinets, yellow formica countertop, had not been painted inside or out since 1985 and landscaping that really needed work, though it's roof was only 5 years old and mechanicals were maybe 7 or 8. I offered $44,000 with closing in 30 days. He countered with a 10 day closing. SOLD The agent made a quick $2000 because she did not have to even put it on the MLS or advertise it. I put in around $15,000 and sold for $85,000 to a guy who was going to rent it out. Agents do work but only sometimes as in the above example. As far a bank owned properties, a few of the small banks around here only sell through a agents as they do not want the headache of dealing with them.
As much as Ive tried to help on this subject I hate to sound negative .
People that can do this work need to take a serious look at this business if even for retirement . In other words they need to do somthing . Maybe not rentals or flips but at least should take a hard look if their skills and tools are in this area. Nuff said there.
I always think about a true story of my car dealer uncle telling me what he believed to be the truth. It seemed to be his experience. That story always leads my thoughts into this subject. So with out any further to do,.. <G>
I asked him about auctions and he said he didnt like them. I was amazed! I said how else do you buy? Well, not from car auctions Ill tell ya ! I had to have his real answer so he told me .
You end up at an auction with a bunch of pros looking at the same rig. They know damn well what its worth and will give up to what it takes for a profit . So I go to an auction and give more than any of them will give and Im declared the winner of that rig. Where does that put me ? In any business you have to have an edge to competition somewhere because every month probably wont go smoothly. If I take that move on the checker board to pay top price of what I consider to be a fair apparaisel , then my buyers have to be more wealthy or somthing. They are not , so you tell me how Im going to get an edge . I could not .
Heres what I told a friend looking for advice the other day when he asked about buying units to flip to rentals . He was planning on contacting his realator and buying somthing to invest in long time rental.
You are going to a retail house and trying to buy wholesale . They have retail buyers that will pay more than you is the first thing. They would lose money if they sold it to you becuase of loss of commision. The next thing is this broker you are going to would buy the house himself at the price you could give . So we did the math;
I told him we would calculate the worth of the house using the rental approach. The house will have to pay all debts plus 200 per month profit . I came up with a fair market number of rents. I came up with a high 90 percent occupancy. Whats left is what he can give max. It was far less that the retail value . Time to move on and find somthing else.
He seemed disapointed so I said finding them is the object at the right price . Once you find one you can celebrate.
I have bought from an agent several times but thinking back they were distressed situations where the agent needed a bid. My findings are the same as yours . Still as cynical as I feel about buying through agents they can produce especially if leads dry up . Just cauction about not getting caught up in the sales pitch.
I attended an auction not long ago and bought a backhoe at a wholesale auction thinking I would score since really I was a retail buyer. They were waiting on me . Frenchy wrote me an email warning me but I didnt get the email until I got back home . He would have saved me some money because every thing he said that would happen did . Wholesale buyers rode the bid and when I quit the auctioner got one more bid from me . It worked very well for them.
Tim
I expect to be in some aspect of the flip and/or rental business in about 3 years( waiting untill both sons through college,while simultaneously getting my ducks in a row)
as a roofing contractor i come across what look like excellent opportunities---without looking---probably 6-8 times a year.
example is a house we will be roofing later this week(if it ever stops raining)
older cape--nice lot, nice location.---son handling transaction for mother.--son tells me he is fixing up house for sale--as he wants to get mom in apartment. Neither son nor mom want house-and it needs a lot of visible work.
encounter this EXACT scenario--and similar ones----probably once a month--and sometimes several a week---just not currently focused on pursuing the opportunities at this time---but soon.
stephen
Stephen, if you really don't want those houses, now is the best time to practice making really low wholesale offers. That way, you won't be dissappointed at your closing rate and you won't get sucked into paying more for them. If someone says yes, you'll find yourself in a profitable situation so fast that you will be sprinting down to the mortgage guy.fka (formerly known as) blue
I was going to respond to you and forgot sorry.
I dont want to be negative but what stood out is you hitting business with a customer . Most of the time you insult people with offers .
The reason why is exactly what Ive been talking about . You will be a wholesale buyer talking to a retail seller and thats quite a price difference .
As I always tell people , I cant give what your house is worth and hopefully it sets the tone of the conversation to talk down gently.
Tim
dont want to be negative but what stood out is you hitting business with a customer . Most of the time you insult people with offers .
Are you warning him about mixing the roofing business with real estate buying? I was a bit confused by the post.fka (formerly known as) blue
no blue--- i think he is warning about "pouncing" on an unsuspecting roofing customer that looks like they have a home they can no longer keep up--something to that effect.
I am glad he pointed it out---but that's not really the situations i am talking about.
Usually the potential opportunity arises rather organically----with the customer "offering" the house to me.
good example is the current roof I SHOULD be doing today( and,if truth be told it should have been done a week ago---weather delays etc.) I know the son of the owner quite well---He is handling the whole thing. I mentioned that my materials had been delivered and that I noticed that he had had a tree cut down" looks like an entirely different house-- I didn't recognize it and almost drove right past it.- Is that the house you grew up in?" says I.
He responds" Yes, but now I need to sell it and move Mom into an apartment. Do you know anybody that might be interested?"
I told him about one of the guys on our crew who has been talking about buying a house for at least 6 months now--and I will talk to the crew member on site when we start the roof--------------------but if I was seriously interested in picking up a house-- I had the perfect opening right there-- and I wouldn't have even mentioned our crew member.
this type of thing comes up suprizingly often each year. plus people call each year from out of state--about a house they still own back in akron.
without even looking for these-----and assuming i could only close the deal on maybe half?---more come into my sphere of awareness than I could rehab each year..
BTW-- blue-- i wasn't fully aware you had moved to Austen.
you are tied with Akron for spot #16 on the "most houses foreclosed on in the nation" list.
you really can pick 'em-Detroit to Austen?? LOL.
personally-- I am quite excited because I realize every problem is ALSO an opportunity--if we can just figure out what the opportunity IS
Me??? Hail Storm june 8th---brings flood of roofing work generating$$$$ for atleast the next year or so------At the same time houses are being foreclosed on and will shortly be for sale"cheap"
classic buy low sell high moment??--rare moment when excess cash lines up with surplus houses?-not the time to be SELLING a house---but perhaps the time to be BUYING houses???????
frankly-- i feel I am in a bit of a pickle--as I am poised to shortly "retire" from roofing and I have at least 3 excellent avenues to follow ----having a problem choosing which one to focus on--possibly a combination of 2 of the 3----and somewhat suspicious there might really be 4 or 5.
Best wishes to you in austen
Stephen
Hazz, thanks for the warning about Austin being 16th in the nation for foreclosures. I do know how to pick my location eh?!I've read Tims response, so this reply will take them both in.This thread is very interesting to me because flips is exactly what I am doing here in Austin for the near futures. That is our focus and I think it's interesting that what we are doing is nothing like what we are discussing. Tim is talking about wholesale buying and how you should be aware of alienating your established good customers. I think his warning is right on and I also KNOW you have the common sense to know that too.I think once you nail down your actual goals as a real estate entrepreneur, you'll figure it out that you really aren't taking advantage of anyone, but rather assisting them in solving a problem. You've already touched on two problems "estates and absentee owners". You are the perfect type of guy to look them in the eye and say...just like Tim mentions "Yes, I can help you out but I can't pay what the house may actually be worth to you." Then, you get to elaborate. Basically it comes down to common sense and common business practices. When you take responsibility for these houses, you have carrying costs, repair risks, repair supervision costs, risk of selling, risk of market and price collapse, etc, etc, etc. All you have to do is speak about these issues in a straightforward manner and offer to give them as good as a price as possible and if you ad this little blurb "you probably won't be interested in my offer" you are homefree to offer as low as you want without insulting them. Basically, you lay it all out on the line and tell them that you buy at wholesale, like any other business, fix up and sell at retail. It's all business dictated by hard numbers...not emotion.It's actually a very simple proposition for them. Do they want to go through all the time, effort and risk that you are willing to take on, or let you have it at wholesale? Don't discount your offers until you make them.For instance, I was trying to move the Lake Huron property and the realtor had a live buyer. He knew the history of our listing....started at 649k....eventually dropped to 550k...as the MI market continued to decline, we decided to list it as the best buy in that MLS market at 479k. The realtor calls me in an apologetic mood and says the buyer is offering 400k cash. To some, that might be insulting but to me, I was estatic. I had a real live offer, therefore I had a choice! I told the realtor that he shouldn't be so apologetic and that I was pleased that he had finally solicited a real offer but I wouldn't accept and I wouldn't counter. That was my negotiating tactic. But think about this: What if I had another deal brewing that would net me 100K and the only thing holding me back was that I needed some/all of this money or credit line opened up? The seller doesn't really know my situation, only I do. There was actually a very good possibility that I could have said yes to that 400k offer and been glad that it was there. Summed up....you are doing people a favor by making offers. Don't forget that. Some will say no, some will say yes but every offer is just that...an offer. No one is forced to take it and as long as you make it clear that you understand that they can get more for a retail offer and you are making a wholesale offer, no harm is done. FKA Blue (eyeddevil)
blue,
i have always viewed myself as being in "the problem solving business"
people don't call me because they have a perfectly good roof that they are delighted with--they call because they have a problem to be solved.
( as opposed to say--some one who installs kitchens or re-models bathrooms-- I see them as REALLY in the "making dreams come true" business.
so-in the case I described( another rain-out today BTW)--my friend/customer has already told me ,in actuality, that he has an additional problem( wants to sell the house and get his mother into an apartment)
it's STILL the problem solving business!
in roofing---customer has i problem- I propose MY solution-and MY price--there is no dickering---customer is free to accept or reject
on the flip-- i see it much the same way.-you have a problem-ok here is the solution i offer--you are free to accept or reject.
I REALLY do appreciate Tim pointing out what he did-he is very shrewd-in the best sense of the word
but I would say that I am NOT a poker player( or cards of any type)--holds zero interest for me--and I am not a go for the throat kind of guy.-In fact I tend to avoid card players,golfer,gamblers etc.- I don't understand that mind set and i don't fare well within that type of business arrangement
I am more of a" I am doing my thing and if our needs co-incide-GREAT" kind of guy.
with regaurds to Austen- I have had several people tell me that it is reputed to be the most cultured and "northerner friendly" city in Texas.-so perhaps you have landed in the right place
I have had several people tell me that it is reputed to be the most cultured and "northerner friendly" city in Texas
Thats because most of the people there are not originally from there!
I spent three and one half years down there and I cant tell you how many people that I delt with that were from the north, many from my own state.
Doug
It is a mixed bag Doug. I don't know of any Texans in the sub I'm living in right now. Most are from California but they have came from all over. FKA Blue (eyeddevil)
Stephen, you are light years ahead of a lot of real estate wannabes because you understand yourself and therefore can plan to succeed based on your strengths. Real estate offers many ways to succeed. It can also chew up those that don't thoroughly think their goals through and choose the wrong path. For instance, I've long been interested in real estate but have no appetite for tenants. I have one now and I'm accepting the first offer to sell and I'll be okay if I never have another residential tenant. And don't get me wrong...this is a model tenant...not a single problem. I just don't want any. I also have a property manager on that property, but she doesn't work for me exclusively and I don't like that arrangement. Tim on the other hand revels in his landlord duties. He has the stomach for it. Its part of his makeup. It's inevitable that I will eventually end up with tenants...but I also will have a property management team in place and I will not be handling any of the day to day activities regarding that phase of the business. How much have you studied about the real estate business? I always advocate at least 20 of the books that you'll find at the bookstore. There will be endless repeating but each author has their niche. In a rising market, lease options are very seller friendly and would fit nicely with someone that "doesn't like to go for the throat". They are seller friendly because you can offer to pay "retail" from every seller and you can actually get the deals right off the MLS. You can do these deals in nice neighborhoods and only "buy" houses that are in excellent condition, if that's what you want. I know Tim doesn't think it's possible but that's because it's an entirely different tactic. FKA Blue (eyeddevil)
jim-----
i would say my favorite real estate investment book is the " Realty Bluebook of financial tables"
I own 4 other books specifically about real estate investing---but most of my reading has been from the library
RE: lease option.--------most of what I know about that has been from the other side of the deal.
Back in about '89-'90 I did some roofs for 2 partners. they specialized in the lease option/rent to own tactic.---at that time they told me that they turned a house about every 6 weeks.--bought it, re-habbed and had somebody in there renting with an option to buy.( of course you understand that they had several deals at various stages at any one time--and that 6 weeks was not strictly linear?)
also--did several projects a few years later for another guy( also the funnest,most interesting guy I have ever worked for)-he operated the same way. eventually he ran into some problems--------he over-improved the properties, he owned too many at one time and some of the lease/options fell apart( people moved out and didn't follow through on the option to buy)---currently he is back to work as a meat cutter.
BY far the most successfull real estate investors I knew were a father /son team. Between them they owned over a 100 units spread across a 30 mile swath.
the father--back in the 50's-- 60's----------owned a house moving business.He was earning $$$ moving houses out of the way of the Xways that were being built here at that time. He was often able to buy a house for a single dollar----and he was renting a farmers field out side of town that he would store them in---he would move them out of town-park 'em in the farmers field untill he bought a lot somewhere to put them on. by the time I met these 2 in the early 90's THAT tactic was no longer viable---but they were HEAVY into the section8 game--which the insisted was a gold mine.
most of the roofs i did for them at that time were for houses destined for section 8 rental. the father wasn't as active then ,but the son was building up his own portfolio.-they bought a house--re -roofed it,re-wired it, put a basic NEW kitchen and bath in it, New carpeting, painted everything-and moved a section 8 tenant in. Swore it was a gold mine--every house was rented for MORE than they could get on the open market--and the tenants never left. Said a mother would move in with 2-3 kids--and the house was the NICEST house the mother had ever lived in--she never left because she might be paying only $60/month rent out of her pocket while the government picked up the other $620/month.
son said they budgeted $300 a year for section 8 inspection repairs-said just plan omn it--no matter how nice you keep it--inspector will come out EACH year and require a new light put over the back door--or a piece of gutter replaced on one side of the house-etc.----they felt that trivial hassle was worth it in exchange for the government gauranteed, over the market rent!
I knew other folks who rented section 8 ,swore it was a nightmare. THOSe folks ,however were not as business like as the father/son team-and did not do the same levels of re-hab upon buying a property.
father/son team had a niece. the niece and her husband had a special needs child. They wanted to build a large net worth in order to provide for their child-------perpetually. Eventually i deliberately priced my self out of the work for the niece-----she didn't operate with the same long term commitment to the houses benefit as her uncle/cousin.-she and her husband would buy ghetto houses for $4,000---do the least they could to put a tenant in there--then rent it out and complain to me how the tenants abused the house. every repair was of the "just smear tar on it and shut off the leak" variety( her uncle would have said---" replace the roof so we don't have to worry about it for 2o years" )
takes all kinds,eh?
stephen
"Realty Bluebook of financial tables"LOL, I googled that book to see what it was about and I had to laugh because it's all about numbers. What's funny is that would probably be my lease favorite book in my library but don't take that to mean that I don't think the formulas and charts and numbers aren't valuable. I just can't get past the first two pages in books like that. And that pretty much demonstrates how different we all approach what is essentially the same business. FKA Blue (eyeddevil)
"And that pretty much demonstrates how different we all approach what is essentially the same business."
Thats why I dont argue much about different game plans . Its back to those different personalities. I fully realize that some lanlords arent comfortable in bouncer mode and some people dont have stomach for throat tatics. In my travlels Ive met lanlords that were opposite from me that were successfull . Who am I to judge anyone?
I had a deal with some friends that were very nice people and I loved them both as friends. Robbi wanted me to help them out and BUY their house . Oh sh^t.
They invited us to dinner at said house before they were being forced to leave town after losing their business here. Cal they would go and they needed to be gone already as they had jobs waiting on them. They were as called in dire straights?
I decided to just tell the truth and explain my every move to them. As Jerry Clower once said , just be yourself.
I laid out the numbers on their house and explained if I bought it I had to make a living . I showed them how I figgured it and laid it on the table . Thats my offer for the house and I dont care one way or another what you decide to do. In my estimation they were upside down and I couldnt even pay off what they owed with out them paying me . So you want us to pay you to take our house ? I reckon so but Ill answer how is gonna go if you leave it behind for a realator. If I thought their house was marketable I would have suggested it and advised. It was in serious need of expensive repair . It really did not make me any difference .
They agreed to sell the house to me the next day and paid me the extra. I hope we both felt good about the transaction. I know I felt good about it in my heart .
Im wouldnt say that tatic wouldnt work again and again , but I havent tried it .
Tim
That is exactly the tactic laid out in all of the books by Peter Conti that I've read. The key to the situation is first to be honest to yourself with the numbers and treat it like a business. We all know Walmart doesn't pay retail for their goods and sell them at wholesale, so why would a real estate business do that? The other key to your offer is getting all the facts on the table, including realtor fees, dual mortgage payments while they wait for a buyer, fix up costs, etc. I don't see anything wrong with sellers coming out of pocket to get away from a mortgage. It's becoming much more commonplace because so many of them did cash out re-fies and spent the money on cars, tvs, boats, vacations etc. They really aren't "losing" money when they have to pay you to get rid of the mortgage...they're really paying for the toys that they've enjoyed for the last five years on that "free" money that wasn't really free.Even if they don't want to come out of their pocket with cash, why should you?!!! In the end, you actually do them a favor by helping them get rid of the house and mortgage even if they have to pay you 10 or 15k. I had to drop my aking prices on my stuff by hundreds of thousands of dollars, but thats how it goes when the market drops. I don't really mind because now when I buy something, it's also a couple hundred grand cheaper. In essence, I'm no better or no worse off than where I started. FKA Blue (eyeddevil)
No .
Poker has meant so much to me that I attach principle to business . Sounds nuts huh? Its right on for me .
The object of the game is to collect everyones chips . Problem is theres a different personality behind each stack. So a different approach to each personality and set of skills .
Ive had customers that just kept giving me work for years and became good friends . They keep sending friends and family to me . I wouldnt take a chance at upsetting somthing like that or anything considerably less even.
What Im not sure he knows is he cannot give what somthing is worth. Thats the hard part of the whole business . If he gave what it was worth he would be giving retail price and he cant survive doing that .
The hard truth to the the business is the very same as poker . You are taking adavantage of someones weakness to gain adavantage . You cannot take adavantage in someones strong area normally. So we look for weakness and when we see it , we go for the throat . The aggressvive player normaly wins. Thats the truth of the business .
I wouldnt act upon a friend or family member in that matter or a good paying customer .
Tim
Tim, I don't agree with your Uncle. Sorry that just didn't make sense to me.
Your uncle claims that no pro can make a profit at the auctions because the pros are there bidding too. Well, if there isn't any money to be made by buying at the auctions...why are they there in the first place?
Sorry, there isn't usually too much I get to argue with you because you are normally spot on, but this time I get to pick a fight with your uncle!
Hope your tickers doing well.
jimfka (formerly known as) blue
"Tim, I don't agree with your Uncle. Sorry that just didn't make sense to me."
Just curious, how many real estate auctions have you gone to and actually purchased a property? Gone to at all? I ask because the 30 or so I have been to I found exactly what his uncle was talking about. DanT
You are right, winning at auction means YOU just paid more than anyone else present was willing to. Not always bad but you just paid more than anyone else. Anytime I buy something at auction (never a house) I feel just a bit funny.I think getting the inside scoop on a distress situation might be the number one thing to get a property with some room in it. .
.Nobody is as good as they seem, nobody is as bad as they seem either.
I've been to two.
No one wanted the house at the first one. No bidders.
The other auction I went to had about 200 properties on the sheriffs steps. I didn't see anyone bid more than the minimum bid on any of them and the bank took back probably 175 of them.
He was talking about an auto auction and my point was this: how is it possible that every auto bought was a losing deal? Didn't those "pros" buy some autos? Wouldn't Unlces advice extend to them too...meaning that Uncle would be telling them that since they were the winning bid, their bid is too high and therefore they won't be able to sell the car competitive enough?
Somebodys gotta be buying at the right price there or they woudn't never attend again and pretty soon the auctions would be empty of wholesalers and only have retail buyers.
We are getting geared up right now for the Austin commercial and multifamily auctions. Were seeking to put a pool of half a million and more in the Austin market. I'll keep you posted when something starts happening in that arena. fka (formerly known as) blue
you nailed it in the auto arena. i was one of those lowly car dealers for about 15 years[now i've moved up a notch to landlord]. yes your at a auction,yes you gave 50.00 more than anyone else standing there at the moment.
but,you have to have inventory to sell,now in theory everyone at that auction is a dealer and not going to pay retail for the car so you were high bid at a wholesale auction. and something you have in the car bussiness that you don't have in real estate is,blue book,nada,black book guides to help you guess what retail/wholesale is. i'd love to have one of them in real estate ,but there is just to many vairables to contend with.
i have stole some properties at auction,because what kicks most buyers out is you have to have the money,there are no contingices,no inspections,no bringing mom and dad over to look. it happens in 10 minutes and its over.but you do have to relize that the auction is open to the public and is being sold in a retail enviorment. doesn't mean you can't get a great deal but you will attend a lot of auctions to buy one or two properties.
i can honestly say if i took out the properties that i have bought at auction,my lifestlye would be much different,but i have not been able to buy something i wanted for 5 years or so with the go go attitude in that time. i do think there are rumblings going on that that is about to change. larryif a man speaks in the forest,and there's not a woman to hear him,is he still wrong?
I'm late to get to this, but I am one of those lowly used car dealers and know a bit about auctions. I buy nearly all my inventory at auctions. Nowhere else do I get the protection and selection for what I need. Bottom line is, profit is made on the buy, not the sale. In the sales I frequent, I have about 30+ cars scoped out, cross off about half on pre-sale walk thru, and actually bid on about 5 to get the one or two I buy. I know the auctioneers I deal with in any given lane and the callers who spot your bid. They know me and how i bid. When the new car dealers are there, you just as well walk away, they are floorplanned and don't make money on the car they sell, they make on the financing and add ons (sort of like RE agents) and will pay whatever it takes. There are up to 9 auction lanes running at the same time, and i have about 1-3 minutes to do the deal depending upon who else is bidding. You have to move fast, know what you are bidding on and what it is worth. All that said, properties are much the same. Walk away from most of the "deals" you see. Don't bid against idiots, they don't quit till they win. Work with people you know, you will do better in the long run. Make money on the buy, not the sell. I have bought properties in the past at auction where it was just me and the bank with money hung in the property there to bid, and I've watched my father in law (in the same business) build a large property and rental property portfolio by bidding low and being patient. good luck
Thats pretty well the same ticket as properties but not as rapid.
Ive explained before a lot of the work is in the searching .
I break into a lot of the houses I look at but sometimes it isnt necesary because the out side stops me from wanting to know anymore .
I mentioned one time I buy somthing like 1 out of 10 of the properties I go to sale on. There are many more I never attend the auction on that I have a few hours in.
Tim
"I break into a lot of the houses I look at "
Me, too, Tim. Slip in, slip out, doesn't hurt a thing. Never had a problem with it. Since I'm here, might as well look around.
Greg
Dont the owners live there?
Nah, I only do vacant. Well, there was that one time . . . I went in with tools in hand, ready to demo the bathroom floor, only to see furniture. My mother had rented the house without telling me. No one home, though.
Greg
"Dont the owners live there?"
NO .
First a house looks empty from the outside .
I knock on the door loudly.
Then is approached for windows view looking in from the front entry.
Make way around the house to find electric meter. A fridge will make a meter wheel move very slowly . Our meters now have red lights glowing in them to show activity. If the meter is still powered they are supposed to have a grey locking tab. If they have been turned off by the power company they get a green tag. If they are to be checked by the inspector before repowering they get a red tag. No power employee can power that box with out the inspectors signature. Normally hes present .
I have all repo keys and combinations to all the lock boxes if the house has been secured . They are all the same kind of locks . I can normally see whether the lock has been changed by looking at the type of lock. Most builders buy quickset type locks and homeowners go cheaper than that in this area.
Credit cards work sometimes .
More invasive tatics can be used if Im driving the tool truck where theres no harm done .
Like Greg says , if someone comes the front door was open.
I had rather not use invasive tatics but sometimes its part of the business like firemen entering bad fires. Ive had several agents turn their backs while I used an invasive tactic but none of them objected. I dont think an agent can do that legally and hold a lisense. Of course the practice is not legal period but neither is removing the tag under the couch. If the people are vacated and they owned it then its abandoned because of the action against them. They arent there to care and are not comming back.
Next;
You are really there to help all parties involved .
The lending company needs paid and the owner needs the house to sell hopefully to offset the debt . I got my stepson a repo house cheap. He let it go back and I wouldnt bail him out because I knew I wouldnt have to. I made several calls and he cleaned it up and turned in the keys . The bank made 10 grand and it doesnt show on his reccord. I could have made the same but kids have to learn lessons . So entering houses doesnt really bother me .
If anyone buys repos its part of it .
Tim
Thats really interesting. I didnt know that one key will fit most.
Is not one key acually, its 4 .
Tim
clear back late 70-early 80's i had a real estate lic.. that gave me a set of hud and fha keys.stopped selling by 81 when interest was 13%,but darn if i didn't forget to return those keys. still was using them 4 yrs ago,but i think now they have went to some sort of electric lock.
one time i was prowling around inside when a re agent walked in. told him the front door was open thought i'd take a look,ask him for his card..
if i could just figure those electric lockboxes out i'd be ready to go.
name witheld to prtoct the guiltyif a man speaks in the forest,and there's not a woman to hear him,is he still wrong?
no location on your profile,i'm in kansas so my auctions were kc,wichita,okla city and dallas. i really miss the buying part of the bussiness,but i sucked at the selling part. so that doesn't work out to well,unless your running a storage lot!
but your right,just cause you are top bidder at auction doesn't mean you paid to much ,just that at that moment no one else wanted it for that money. and i know you have seen a guy buy a car for xamount,do nothing to it bring it back next week and make 1500. just means someone else had a need for it that week.
same thing in re, today i'm not a buyer for anything,but if i had a contract to sell one of mine tommorrow,i'm back in the market. larryif a man speaks in the forest,and there's not a woman to hear him,is he still wrong?
I dont know what you are disagreeing with but thats why we are here.
I said use caution to recognize the difference .
My main stream of buying is auctions . They are number one to me in my area.
With that said ;
Ive been to what I considered a retail auction and I cant geter done . Estate sales are much this way and when there wasnt enough houses for the buyers because of slashed interrest was a time I could not buy. I would end up at the court house steps with retail bidders there with their "letter of credit" .
Success has always seemed to mean doing things others werent able or interrested in doing . Not always but in the flip business Ive found it to be true .
The goverment started only accepting cash offers in part of their sales . I dont know for sure why but Im guessing some of those bids fell through with letters of credit. They have a lot more now that they did so they have to move more inventory. I can score at a cash sale .
The units that need expensive repair I can buy and I dont compete with HOs .
Other than that , if all people need is a letter of credit in times when banks want to push money at folks which is not the case now, then its hard to compete with those people that will live there . I have to sell it to that type so I cant compete with them bidding against me .
Going to an agent reminds me of the same . They are a retail house and Im fine with using them for selling purposes. However like the other poster I have found some deals .
Funny Ive got a friend who is a builder that came by yesterday and wanted advice on this same subject. He had burned a tank of gas looking at agent units . He had wasted a lot of time and he was depressed . His main question was how do I find them? Im not going to tell him because he would be competing with me , but Ill tell you that hes gonna buy a lot of experience looking through a retail house for flips .
He doesnt have any work to do and is being forced to build specs on borrowed money. He knows thats not smart but its buying him some borrowed time . Instead of this man working from smart mode hes in survial mode . I think hes gambling and I dont like the odds. Hes the only one building specs here as everyone else has shut it down. Mebbe he will succeed by himself.
Just understand the difference and use caution was my message here.
Tim
I have never bought via an auction, either on the courthouse steps or at the estate. But I have always wondered, how does one satisfy the requirement "cash or certified check at end of sale". Hopefully you don't have a pocket full of cash and how can you have a bank check when you don't know what the final price is.
Sure hope I don't have to go to a sale with thosands in my pocket.
One time I needed to tranfer 25k from one bank to another a block away. Banks being banks they wanted to place a two week hold on a check and I needed quicker access to some of it. Talked to both bank managers about it with no good solution. So I got 25k cash and walked carefully (no stops at the bar or car dealership) to the other bank and made a cash deposit. Both banks seemed somewhat POed at me because of some additional paperwork (some sort of money laundering regulation) and I think I put a bit of a squeeze on the first banks cash supply. Takes a long time to count out 250 hundred dollar bills
Thats funny Bobtim and I hope the bank managers had lots of extra hours.The "bank privacy act" (did you notice my cynicism) requires that the banks REPORT you if you want 10,000 or more in cash. I think the Bush administration was trying to get that amount lowered because of the homeland security act. fka (formerly known as) blue
Either you have the money in the bank or you have secured investments they can use to issue a certified check. Cash offers are the same thing.
Im sure most people think the way you are and dont show up thinking they have to to pay for the house in hundred dollar bills . Hopefully they blow it off and dont give it any more thought.
Heres how it works ;
The bank would loan on the house alone if they have the warranty deed , but they dont at that point . A special warranty or assurance is written the day of sale from the goverment agency holding the sale . If you have secured deposits in any form they can get their hands on they will issue the funds on a moments notice.
In my case on the last house I bought like that last summer I gave they bank a deed on a house I own out right. They issued a loan on that house and I took the proceeds and paid the US marshal. At that point I owned the flip and now owed for the rental that was paid for so Peter and Paul get into the mix. It didnt make me any difference which one I made payments on.
Theres many more ways to pull it off .
Tim
I went to a sale the other day, and any check that was able to be electronically processed was OK. This sale offered a to waive the closing cost's estimated at $1500 for paying the entire amount that day. I have also wondered how many people are standing there, with $2,500 or 5-10% in cash deposit were standing there.
Edited 10/26/2007 9:46 am ET by bdeboer
" I have also wondered how many people are standing there, with $2,500 or 5-10% in cash deposit were standing there. "
You should have been able to tell by what happened during the bidding.
Theres a broker in town that I see at all the sales and he has the money to pay cash. I never have the money to pay cash from my account but I can cover 10 percent . On a 10 percent sale the day of sale two things can happen. One the bidder has the cash and two the bidder normally has an hour to pay the funds . That has never been strict that I know but a lot of people go to the bank and come back to pay. In addition on 10 percent sales they normaly will take a letter of credit instead if is a goverment sale . On private sales where an aucioneer is hired to conduct it , he gets that 10 pecent. Arrangemants with him can be made prior to the sale . Some auction companies take a letter or your good name if you have history with them.
Ive taken a letter to private sales knowing the bank would cut the check off at the pass and pay it . They seldom ask me for my letter but Ive got it . That just means I can write a hot check and the bank will cover the funds which gives me around 3 business days or have the bank call them if more time is needed .
I havent encountered the electronic transfer on a house purchase before but IM sure its comming .
Tim
This is the outfit that said they could electronic process the checks:
http://www.williamsauction.com/RealEstateAuctions/Residential.aspx
From what I gathered they travel from site to site selling the properties for a set fee due at closing from the buyer. The sale I was at was due to an agreement between the homeowner and the bank to prevent foreclosure. The sale was not absolute.
Edited 10/26/2007 1:18 pm ET by bdeboer
Thats a pretty cool site . I found one comming up by me . Thanks .
Tim
No problem, the sales are marked by yellow/black signs at nearby intersections.
Tim, if you make it to that auction I'd be real interested in your take on them.
Our daughter is (maybe) taking a job transfer to Irving Texas so might need a house nearby.
Looks like they have a bunch of them within 30 miles of that ZIP code, might be worth a look.
Joe H
I hate to disapoint but I doubt Ill make it to that one because its too soon.
Ive got two right now Im trying to get on the market and Im not moving very fast these days . I shouldnt have but one in my shape but I didnt resist temtation.
Robbi has been on the computer searching for a score and she ran across that in favorites . She came down stairs and brought me 6 to review and that was one of them.
The only way I could handle another one right now is an all out flip. NO work physically. So she will search for that criteria. Since I have a full time partner now we have split up my work load and she will be the one searching the net and on the phone . She will probably make some sales so she might get to this auction if it qualifies as a quick flip . But when you set those type of limitations its like hitting an inside straight. [Very poor odds ]
Tim
It's an interesting site, guess I'll keep an eye oin it and see if anything comes up locally.
Long way to Texas to look at houses and I have no idea what's around that area.
Gotta make sure to not buy anywhere that is featured on "Cops", and seems like Dallas makes the show fairly often.
Best of luck to you, take it easy.
Joe H
At the sale I mentioned earlier, around 15-20 people showed up. The sale was a weekday at 10 am and rural (about 8 miles from the nearest stoplight). I recognized most of them as "wholesale buyers" being local contractors/rental owners, a semi-retired contractor that only rehabs and sells, and at least one real estate broker/investor. There was at least one "retail" buyer consisting of 3 family members that I recognized. Personally, I had a vested interest because my driveway is about 300' from this one. The house was a double-wide on 1 acre with two detached pole type garages. It had a couple year old roof, newer vinyl siding, upgraded windows, and didn't "smell" bad. The sale was advertised for a starting bid of $10,000.
At the auction a local realtor came and unlocked the property for a showing at 8:00 AM. The auctioneers came in at about 10 minutes before the sale and handed out a form for the bid number. They read the terms and conditions and conducted the sale, bidding slowed about 30K and finished at 45K. I was holding the winning bid. The price will be 45K+3K(auctioneers fee) + 1500(Closing Fee) if the seller accepts it within 7 business days. A $2500 electronically processed check for a deposit was required. 30 business days to close.
As of today the 8th business day, seller has not yet contacted the auctioneer. I have the option of waiting for a response with a later closing date, or getting out of the contract with a written letter because of the non response. I am going to wait a few more days.
A little history behind this property, place sold in 2003, for 83K and had been refinanced May of '06 for 95K. The sale has to be confirmed by both the bank and the owner. I suspect that they will refuse it, and it will go to the sheriffs auction.
Hi guys,
I went to my county site, and there are very few. http://www.wakegov.com/tax/realestate/foreclosures.htm
Is the same in other places?
Here in Ohio the local county sheriff's post the bank foreclosures on their website. I looked at the above link and found this:
http://web.co.wake.nc.us/courts/foreclosure.html
Mostly the banks here have been bidding the properties up to the appraised value from the 2/3 starting bid or above, and sell through a real estate agent. The appraised values may run low, and one property a stick built 70's ranch on 5 acres with newer siding and roof, needing 30 years worth of updates on the inside recently sold for the minimum bid.
Hi,I read that before, but wanted to make sure. So if I want to bid I have to go to the court house and find out when the auction date is, and be there on that day. If I won the bid, then meet all the conditions.
Other's on this site can say it better but that is pretty much it, research the properties. Have a maximum price in mind or walk, and be patient.
If you replace foundations become friendly with all the soil engineers, especially the ones hired by banks to look at problem houses. These guys know a house is being sold "as is" by a bank before anyone else do to the high cost of foundation replacements. 40 cents on the dollar isn't uncommon.
Finance companies know of houses that are being sold before they go on the market. It's good to know, the people who are good to know since they know of other people who know and actually buy these houses. We know them as well and get some good jobs before they are shopped to other contractors.
Good building
Beer was created so carpenters wouldn't rule the world.
We just bought a "flipper" about 8 weeks ago. We should be done in about three more weeks. My wife and I are partners. She is a realtor. I am a contractor. The house was purchased as a repo. We bought a 1977 tri level in a good neighborhood. The cost was $74000. our budget was $25000. It looks like we are going to go about $5000 over. Our expected listing sale is $139000. Our last flip was bought at $125000. We spent $25000 on it as well. THe house sold for $179000. I hope this one turns out as well. Wish us luck.