The rehab is now complete and the house is on the market for $74,900 (I mentioned resale of $70,000, but I like to start a little higher sometimes to see if we can get it.).
|Rehab Scope of Work:||$4,000|
|AC Condensor Installed:||$1,600|
|Fence Replaced (back section):||$400 (split with neighbor)|
|Carpet:||$550 (66 yds including padding)|
Note: We normally put in new dark vanities, hence the dark mirror. Doesn’t match well with the existing bathroom. We need to change that.
Next: Follow Along As I Open Up My House Flipping Business
House looks good. Did you do the landscaping yourself, because you don’t have it listed in the costs. If someone completed it for $150 bucks please inform us how you got that deal.
Also, when you first started out, how did you work with contractors and their pricing? I’ve done one project, rental property, and even though I explained that I would need maintenance on the property and will be adding to my portfolio over time I generally got only retail prices from contractors. Luckily we was doing most of the work so it wasn’t a huge issue.
Thanks for pointing that out. I must have forgotten that expense, but have now updated the post.
When I first started, I would have at least three contractors give me estimates. Usually, one would be super high and the other two closer to each other. I would negotiate the with two lower ones. Sometimes I would go with someone that gave a slightly higher bid (not outrageously high) if I felt more comfortable with them. You have to negotiate. I don’t know any contractors that will give good prices all the time up front. I still negotiate every job with a guy I’ve been using for over 3 years.
One way to help make sure the 3 or more contractors you have give estimates are good is to have them referred to you. Ask other investors. Some don’t want to share their good contractors, but others that can’t keep them busy, will.
Danny, thank you for your thoughtful posts. I represent the downside to what you’re doing — I’m a potential local competitor — but I know I speak for everyone when I say we’re all extremely appreciative of what you’re doing.
I’ll keep my newbie REI questions to the forums, but I would love to hear of any information you could offer specific to San Antonio. I know there’s far more to talk about than you could realistically answer, but just to get me started, do you have contact info for a S.A. REI club? The two I’ve found appear to be defunct.
Again, thank you for what you’re doing.
Thanks for the compliments. Don’t worry about asking any kind of question.
I’m sorry, but I do not have contact info for any clubs. I used to go to SAREIA when I started, but that is now no longer. The only one I’ve heard of lately is Lifestyles, but don’t have any contact info.
Glad to have you here and participating.
21 leads in a week, that’s solid!
What do you find your conversion ratio is?
I think that we usually have about 1 deal per every 50 leads that comes our way (including all junk leads). Sometimes I find that I get frustrated when a deal isn’t coming. But you’ve reminded me of something here — if I want to get a deal faster then I need more leads faster — thanks Danny!
That’s a great question. If I didn’t track my marketing, I wouldn’t know what it is and what I am trying to beat. My conversion rate for last year was 5%. So for every 20 leads roughly, I would land a deal. No so good so far this year, but it never is consistent. Sometimes I go several months (like right now) with nothing and then I get 3 under contract in a week. Hopefully this year will end up averaging out better than last. I am trying the whole gamut of marketing again this year to refocus and see if the things that did not work so well in the past can be done better and perform better. We’ll see.
5% conversion is great! Yep, agreed. It’s tough to know for sure if you don’t track. And I’ll admit that I’m not the best at tracking. I came up with my conversion from the 100 leads that I DID actually track and 2 deals popped out — I’ll take it given the ROI – you’ve definitely been putting a lot of work into sharing your info — trust me, I know that it takes a TON of time to post in addition to the actual investing that you’re doing — so thanks!
Thanks for the appreciation and thank you for sharing your conversion information with me. I really do like to hear how other people are doing. It’s a great way to find out what the best things to do are.
OK, scrap my prior carpet question. lol Looks way better than the green. Gracious, this makes me want to start a blog of my REI life.
I’ve noticed as I look through your finished houses that you don’t replace cabinets/vanities/toilets/counters in every house, nor install appliances in all. What determines this for you? If this has already been answered, please just point me to the right thread. I would appreciate as much detail as you can muster on this, because the market where I am in Weatherford/Granbury is very similar to SA with regard to what finishes sell well/fast in different types of areas.
I do differ from some investors on this point. I hardly ever put appliances in rehabs. Dishwashers are put in if needed, but we don’t usually put in stoves or refrigerators. My thoughts are that we would not see an adequate return on the investment. Maybe I’m wrong, but we’ve not had a lot of feedback from buyers about houses not having appliances. If a potential buyer does gives feedback stating their desire for the house to have appliances, we usually tell them we’ll give them a credit so that they can pick out their own appliances.
As far as everything else, it really is just a matter of how nice the existing stuff is and what the competition has. If your competition has new cabinets and new counter tops, it’s probably advisable to put them in your rehab or adjust your asking price to reflect the difference. Usually with houses in the lower price ranges, a good price is a better selling point than new toilets. It really just depends on the houses you will be competing with.