100 Year Old Home - Leaks, Creaks, Should I FREAK?
Since I'm a new investor I haven't quite figured out if I want to be a wholesaler or rehabber. I've come across something and had a few questions on pitfalls.
The house is old and needs a LOT of work.
-radiant heat
-1st floor bathroom toilet has some kind of leak that drips down into the basement. It's a bad drip, when I go down there it's just drizzling.
-floors need new subfloor everywhere and finishing
-needs sheetrock everywhere
-new bathrooms needed.
-siding is old wooden, needs new vinyl or aluminum, or new paint only?
-stairs to the front door, need to be totally redone.
With all the work that needs to be done, is it best if I just try to assign my contract out to a rehabber? Are there too many pitfalls for a newb?
by the way you described some of those problems, i'd say you should assign the contract out (hehe). if you're going to get into rehabs, you'd better have (or quickly get) the experience to know what you're paying people for. if not, you'll lose immensely. there's good money to be made rehabbing sometimes but you'll get reamed everytime if you don't know how much it really costs to do a floor (for instance).
do a kitchen floor yourself and keep receipts of all the materials and see how much it costed you - then when you get a quote from a professional, you'll get an idea of what they're charging you for labor - and the funny part is that they'll do it 20 times as fast as you were able to. now that you know floors, apply that same principle to plumbing, roofing, painting, drywalling, carpeting, landscaping, etc ...
if it sounds overwhelming, go wholesale at first! :-D
Ok, sounds about right to me=) I wish I took care of building a buyers list ahead of time.
Is it typical for a rehabber to give a 1-2k deposit on an assignment of contract? I heard this on an internet REI program. Also to have no contingencies, so that on closing day with seller and rehabber, they don't back out last minute through a weasel clause. Is it true that a REAL rehabber is comfortable with this?
I just want to be doing this the right way and not dealing with a scammer or someone wasting my time. I also don't want to scare off a real deal just because of what I "learned" listening to a guru.
these things are totally up to the buyer you have. some will and some won't, that's strictly a personal choice for them. in my experience, half up front and half at close would happen sometimes - but mostly they want the no money up front thing, in case they decide not to close.
Quote:
Is it typical for a rehabber to give a 1-2k deposit on an assignment of contract? I heard this on an internet REI program. Also to have no contingencies, so that on closing day with seller and rehabber, they don't back out last minute through a weasel clause. Is it true that a REAL rehabber is comfortable with this?
Chances are, they will be find with those clauses. As long as they are not tire kickers, and serious investors, they should have no problem with the terms. I'm sure they used to be in the same situation your in now, just beginning.
[addsig]