Excel in Real Estate Investing! Learn to Fix & Flip , Step by Step!

1. Welcome to our Course!: So you have seen the TV shows where people make tons of money flipping houses. If this is your dream, but you don't know where to start, then this is the course for you. In this course, we show you from beginning to end how to flip houses with minimal money out of your pocket . The best part is you won't need to quit your job or know how to fix houses to do it. This course comes with detailed instructions, videos of property, walkers and tons of coaching. So what are you waiting for way? Provide a 30 day money back guarantee. So you have nothing to lose. Enroll now and begin working towards earning your 1st $20,000 in real estate. 2. Intro: hi and welcome to my course on residential real estate investing. I'm Corey Parker, real estate investor, also author of the book The Lost Curriculum. What School Did Not Teach us about Personal Finance. The purpose of this course is to educate you in a system that I use to rehab residential real estate. The aim is to teach you how to generate a profit while minimizing your risks and your out of pocket expenses. By the end of this course, you'll be equipped with the knowledge resource is and the confidence that you need to be able to go out and successfully complete a profitable real estate deal. Overall, this course is jam packed of information. It took me many years and a lot of time and money to figure out. Keep in mind there are many ways to make money in real estate. I'll show you the way that I'm most familiar with. And the way this works for May Real estate is not hard. I've intentionally make this course of straightforward and simple as possible to help you get to making money as soon as possible. In this course, I'm going to show you from beginning to end how to find the property, get it financed, get it fixed and, ultimately, how to get it sold for a lot of money. Now, when I say a lot of money, realistically, depending on the area that you're working out of, you can expect to earn anywhere from 10,000 to $50,000 per deal. When it comes to finding a property, it's great if you already have a property of mine. If not, I show you how to leverage the help of a local real estate agent or wholesaler so they can do the work and bring you a property that you can measure against your criteria to determine if it's a good deal or not. Now, when it comes to finance your property, we all know that it's better if you have cash. But let's be honest. Very few of us had the cash to purchase, and we have a property. In this case. I show you how to find hard money lenders who financial deals for you. I will also tell you what to say to the hard money lenders to get through the lend you the most money. This will ultimately allow you to minimize your out of pocket expenses. Now, when it comes to fixing your property, it's great if you're handy and able to fix the property yourself. This is surely save you some money. However, if you're like me, you are unable to fix anything in the house. That's not a problem. I'll show you have the leverage, the help of a GC general contractor who four feet will oversee all the repairs in your house. Finally, when it comes to selling your house, I'll show you how to leverage the use of local real estate agents and or social media to get your house sold. Now, because of the large amount of details provided in this course, the majority of this course will be me speaking over slides. I'll also include before and after pictures of a few properties I fixed. It flipped in the past as well as videos of properties that were currently even thinking about purchasing or currently in the process of rehabbing. So be sure to take notes as we go through the course. This course is ideal for anyone who's lack knowledge of confidence, of how to complete a real estate rehab deal. Whether you're a beginner, intermediate or advanced real estate investor. The information provided in this course will help you make a profit when doing a fix and flip. All that's required is that you maintain a positive attitude and do not give up in the next section. I'll talk more about the mentality that's needed to be a successful real estate investor. If you dreamed of rehabbing, this is the course for you. Thanks again for enrolling in this course and let's get started. 3. Mindset for Success in Real Estate Investing: welcome back. So a lot of people question what it takes to be successful in real estate. My answer is that many of the same qualities that will make you successful in everyday life they'll also make you successful when it comes to completing a profitable real estate deal . First, let's start with passion. I'm a strong believer in the fact that people tend to perform better when they have a sincere passion for what they're doing. Ask yourself, Are you truthfully passionate about being a real estate investor? Do you enjoy driving around friends and family looking at houses? Do you get excited when you walk into a dilapidated house because you see the potential in it? Do you spend hours watching real estate shows on TV? Would you enjoy improvement communities by fixing up properties and thereby increasing the viability of the neighborhood and market value of houses in the area? If you answered yes to these questions, then chances are that you're passionate about real estate. If you answer no. But this is the point where you need to seriously ask yourself, Is real estate investing all about the money for you? I can tell you that If you don't have a passion for real estate rehabbing houses, then you know you can still make money, but you're not as likely to be successful if it does not allow your core values and life. Chances are real estate investing. You'll see it is work and it won't be enjoying before you. If this is you and you realize this course may not be for you, I provide a 30 day money back guarantee through your Demi. In my opinion, be successful in today's real estate market will require a certain level of passion for the business. Next question. Do you have the mind state to be successful in real estate? Reason. I ask if you re have enough properties. There will come a time when you face a serious challenge that will have the potential to kill your real estate deal. Ask yourself, Do you want to win? What I mean by wanting to win is Are you prepared to overcome any small obstacle? In order to get your property sold and generate a profit? I found that you can take the same problems two different people. One person to see the problem is unfixable and at the end of the world. The other person will immediately see the problem is an opportunity, and this will lead to a solution that will ultimately solve the problem. Do you have what it takes to maintain positivity, optimism and a problem solving mentality throughout your real estate project? Finally, let's talk about your aim or your ultimate goal. When doing a rehab project throughout your project, you should aim to reduce costs and expenses without sacrificing quality. You should also do what you can to minimize risk. The ultimate goal is that you will complete your fixing flick project on time and within budget, so that ultimately you will generate your expected profit later. In this course, I show you how to do just that. 4. Past Project #1 (Before and After): Okay, So I put together this quick video to give you an idea of the types of deals that we've done in the past. This deal in particular, I bought from a wholesaler. So the wholesaler had the property under contract for $20,000. Then the wholesaler charged me $7500 wholesale fee. So my final purchase price for this property was $27,500. So this deal made sense for two good reasons. One because I knew the cops in the area where about 1 10 or 1 15 after the property was all fixed up and to I knew my general contractor could do a good high quality, rehabbing his house for about 40 to $45,000. So I calculated a good expected profit of anywhere from 30,000 to $40,000. Now, let's take a look at some of the before and after pictures of this property. Okay, so we'll start on outside. If you look right here, you can see there's bars in the window. Looks like it's old railing and looks like it's old door up there. So not much curb appeal just yet. But then again. It's hard to tell because the property is covered with snow out front. So let's take a look at the inside. Okay, so let's start out here in the bathroom. Noticed. The bathroom is very old and very outdated. We definitely need to go through and renovate this. Moving on to the bedrooms. Noticed these very old windows once again, very old, very outdated. We need to also replaced windows. So one good thing about this house is that it has very nice hardwood floors. Let's move on to the living room area now in the living room. Notice once again, great hardwood floors. Look to your right. We have the wall mirrors. They're very old, very outdated. We definitely have to take those down. One other thing that I do not like is noticed This wall that separates the living room from the dining room. It makes the house look a lot smaller than it really is. Now here are the new after pictures. If you notice the front porch looks a lot better. So we had the contractors paint the railing, swap out the windows. We also have a new door, new trim around the door. We also have a new mailbox, a new address plate and nice tiles. Tow line porch. You can't really see it on the top of the porch. We also repainted it a nice would color, so it looked really, really good by the time we were done. Now let's check out the bathroom. If you notice the bathroom looks a lot better now, we redid the floors of shower with ceramic tiles. We also added a new tub, vanity and light fixtures. Moving on to the bedroom. We decided to put carpet over the floors to give it a nice, comfortable field. We also add nice crown molding, new windows, new mini blinds, a ceiling fan and, of course, new drywall and paint. This was a two bedroom house, by the way, and we made the same improvements to both bedrooms. We also added new six panel doors throughout most of the house. Now let's head downstairs. So our contractors did a really good job of renovating This floor, noticed the recess, lighting the new door, new windows and the floors that we were able to re finish. Also, remember the wall from a dining room to living room. Notice how we were able to square that out toe, open up some space. Now in the kitchen, you're going to notice the new windows, new back door ceiling fan crown molding throughout and ceramic tiles on the kitchen floor. We update the kitchen with new stainless steel appliances, granite countertops and cabinets. Are buyers fell in love with this kitchen. Now here's the before picture of the backyard. Since the house was so nicely done, we decided after the fact, to add on a nice deck to help compliment the nice rehab that was done within the house. Now let's go down to the basement. I don't have any before pictures of the basement, but trust me, it was horrible. So we put down wall to wall carpet in the front of the basement. In the back, we put down ceramic tile. We also add a recess lighting to the front in the back, changed out of window. Also added a new back door here. We also added a basic washer and dryer set moving on to the sale of this property. We were able to find a buyer and get this property sold all within a total of seven or eight weeks prior to that, it took the GC about eight or nine weeks to rehab the property, which was a little over schedule. But I was happy with the work that the GC Day and I was happy, ultimately with the end product and how it turned out. Overall, this was a really good deal. When it was all said and done, the buyer bought the property $413,000. That made me meet my expected profit of $35,000 for this deal, which is great because typically, like teaching this course, we aim to get $20,000 or more per property. And hey, you get more than that great. But we try to set our expected profit at least $20,000 to make it worth your time and efforts. 5. Finding and Financing Your Property (Section Intro): Finding your investment property is arguably one of the most important parts of your real estate projects and real estate. It's often said that you make your money when you buy the property. In other words, the profit that you make on your deal is largely determined by your ability to purchase the property at a little cost. Now some real estate investors strongly believe in finding your properties by running the we buy houses ads in the local paper, tracking down deadbeat landlords or knocking on doors to negotiate with homeowners and distress who are on the way to losing their homes. These approaches work, however. They take a lot of time, effort and money. The goal of this course is to keep it as simple as possible so you can become a successful real estate investor without needing to quit your day job. This means that instead of going out of your way to track down deals, you'll work with a local real estate agent or wholesaler, and that person will bring you to deals that fit your criteria. In this section, we will talk about locating and getting pre approved by a hard money lender, finding a real estate agent or wholesaler who can bring your deals developing a criteria so that you can gauge the profitability in a deal and finally making a good offer on a property that you're interested in. We will then go check out a few properties to get a sense of what we're looking for in a deal, and to put some of what we learned to use as a side note, I will frequently update this section based off any questions that you all may have. 6. Selecting your Hard Money Lender & Getting Pre-Approved for the Hard Money Loan: Okay, so now on notice, you're ready to go out and find your first investment property. But before you can go out and get your first property, you need to get your financing lined up. So let's take a step back for a moment. When investing, we use hard money lenders to get loans for our property. There's a good reason why we do this. If you've ever used a traditional bank loan to buy a home to live in, that you know just what I'm saying. For those who don't, traditional financing tends to be more difficult to obtain. For example, the lenders or not, it's flexible. The lenders are a lot more concerned with the qualification of the borrower, and they're also more critical of the condition of the house, not to mention the large amount of financial information that she will have to provide to the lender throughout the process. Also, the long underwriting process that many traditional lenders will take you through all of this, and it still takes 30 to 45 days on average to close along with the traditional lender. Now the great thing about using ah hard money lender is they're focused Mawr on the potential profitability of the deal that you are purchasing and less on the borrow. Now don't get me wrong Now they're still concerned with the borrower's ability to successfully complete a project. Throughout this course, you'll learn the basics that you need to prove to heart money lenders that you know how to complete a profitable real estate fix and flip deal. Now, when you go talk with an agent or wholesaler in order for them to take you serious, they need to know that you're actually able to purchase any property that they bring you. This means that you will need to find a heart moneylender who will be able to provide you with the pre approval and proof of funds. Letter this info coming useful because many banks require that to submit either the pre approval or proof of funds when you submit your offer. Okay, so when you get the pre approval in proof of funds, what this is communicating to the bank, the age and the wholesaler is Hey, I have money, I have financial backing, and I'm ready to purchase any deal that come before me. Within reason of course. Okay, so The first step is that you want to find the hard money lender. It's best if you find a referral from someone close or a fellow real estate investor. But if no one that you know was able to refer, ah, hard money lender to you, a quick Google search provides some heart money lenders either in your local area or at the national level. There are a lot of hard money lenders out there and believe it or not there fighting for your business. So when it comes to choosing the hard money lender, you should be most concerned. The following items One is the hard money lender licensed through the national mortgage licensing system, also known as the N M L s to How quickly can they fund your deal? Three. How many points will they charge you for your loan, for how much interest will they charge you? Five. What is their loan to value or LTV requirement? And is that based on the sales price or the after repair value, which is also known as the A R. V in six? What is the term of the loan now? I live included additional information in this course that will give you more details on the typical rates in terms that heart money lenders offer. You will be able to use that information to compare against the rates in terms that you're hard money lender is offering you. So after you've decided on the hard money lender, your next goal will be to work with this hard money lender to get a preapproval letter and or proof of fun statements. Now the hard money lender will usually pre approve you after you provided basic personal information such as employment history, whether you're employed or self employed, credit report, history or knowledge of rehabbing and requested loan amount. Now note that even though you may get pre approved for heart money loan, the big issue is whether it will be funded or not. Hard money lenders tend to put less emphasis on your income and credit as long as you have real estate knowledge and a great deal at the end of the day. Ah, hard money lender. They make their decisions based on person by person, deal by deal, in case by case. It all just depends on what you can bring to the table. So let's say, for instance, if you have a low credit score, then they may not look at your credit score per se. But the hard money lender may review credit report and say, Hey, this person you know they typically pay most of their bills on time and you know, they have a low credit score because of bad credit issues a couple years back, you know, So they're going more so way it based on how great of a deal you bring to them and how well they think you are able to succeed in the deal. But don't work. By the end of this course, you have all the knowledge that you need to talk the talk with the heart money lenders. And later in this section, I'll show you the criteria that you need to find a great deal that the heart money lenders are looking to finance. Along with the pre approval, the hard money lender will provide you a proof of funds that you can take to your agent or wholesaler. Some hard money lenders will charge a small fee, and others will provide you this for free of charge. 7. Sources of Property (Real Estate Agent or Wholesaler): So let's talk a little bit more about the sources that you will go to to find your property for you. One option is to use a real estate agent. Now, I'm not talking about just any real estate agent. You're one of focus on finding an investor friendly real estate agent. Now that's just another way of saying an agent who frequently works with investors. The benefits of finding an investor friendly agent is that they'll understand. You may submit multiple lowball offers with the intent to get a great deal. For those of you who are familiar with the term lowball offer, it just means they were submitting an offer for less than the seller's asking for the property. Now, submitting lowball offers is a conservative strategy, and it's great because even though many of your offers may not be accepted when one has finally accepted, you'll know that you're getting a great deal on that property now. This isn't to say that you cannot use the traditional real estate agent, however, understand that a traditional real estate agent that primarily works with home buyers, they may become very upset and irritated if you use a strategy like this. You have to understand, Ah, traditional real estate agent there more so focused on, you know, helping individual find that quality house, you know. So they may go to 3 to 5 houses on the weekends and help this person find the house of their dreams. But now, as a real estate investor, it is quite possible you could be submitted 20 to 25 30 different offers a week when a house that you may never by so is definitely better. If you focus on working with investor friendly real estate agents, as opposed to traditional real estate agents that are used to servicing traditional home buyers, your first stop to find an investor friendly real estate agent should be through referrals . I'll say this several times throughout the course, but in this business I always check with referrals that I received from trusted family friends and also other investors. Another good source to your local real estate investor clubs or real estate meet ups that are happening in your area. You can also usually find these investor friendly agents through ads that they may run in your local paper as a last resort. Ah, quick Google search for investor friendly agents in your area will help you to find a local investor friendly real estate agent that can help you find your next deal. Now, if you're still having problems finding a good investor friendly agent, I've added some resource is in this course to help you find local real estate agents that are in your area. Okay, so after you find your real estate agent, he or she would use the multiple listing service, also known as the MLS, to help you find a deal. Now, for anyone who isn't familiar that in my last is just a database that list houses better for sale across the country. The real estate agents in your local area will use the MLS both to list and also to find properties that are up for sale now. Typically, when you submitted offers through a real estate agent, you would need to put a monetary deposit down to prove your interest in wanting to purchase the property. This is also known as an E M D. Or we call it earnest money deposit. Now, the amount that you have to put down for this deposit is going to be determined by the seller and also the seller's agent, and this earnest money deposit will be held in escrow account until you go to closing for the house. Okay, so we talked a little bit about how you can find great deals by using a real estate agent. Now let's talk a little bit more about how you can find great deals by using a real estate wholesaler. Many wholesalers go out and do the grunt work to help bring you deals. They make the cold calls, knock on the doors and managed to find great deals at low prices. Often time. These deals are made available to you before they're made available to the general public or to the MLS. In return, these wholesalers would provide you the deal for a fee. So here's how this typically works. Ah wholesaler will assign a contract to you for a fee so that you can purchase the house. When the wholesaler is assigning a contract to you. The wholesaler is signing over their right to purchase a piece of property to you. This means that you will now become subject to the terms, conditions and pricing that the wholesaler initially agreed upon. with the seller. In this case, after you pay the feet to the wholesaler, you will then have the right to buy the property. No, that wholesalers can charge any fee that they want to. That being said, the fee is negotiable. Keep in mind that your focus should be on the projected profit of the deal. Most wholesalers would give you a breakdown on how much it will cost to repair the property and how much you can expect to receive after you fix it and sell it. That's good, and it can help you in your research. However, you should never blindly trust the wholesalers numbers. Always have your own GC general contractor. Give you a quote on repairs and either verify the cops that the wholesaler provides you or run your own cops. In other words, make sure that you never, ever just blindly take the information provided by the wholesaler and always do your own due diligence before purchasing the property. Now there's some benefits of working with the wholesale, and quite honestly, I prefer working with wholesalers. The benefit of working with the wholesaler is that they already have control of the property in other words. When you are putting an offer, and through an agent, you're up against any other number of potential buyers. You put your offer end, hoping that it's high enough so that it gets accepted while also hoping that it's low enough so that you're getting a good deal. This could take a while. You're likely had to submit. Many offers dependable. How competitive of a real estate market you're buying it now. The great thing about working with the wholesaler is the wholesaler already has control of the property. So instead of the property being made available to the general public, the wholesaler will usually put it out to a small list of investors. Or if the wholesaler knows you're ready, willing and able to act fast, they will come directly to you before putting out this property to their buyers list. When it comes to deposits, most wholesalers will request that you pay at least the mouth today to pay to secure the property with the seller. Overall weather, real estate agent or wholesaler is finding the property for you. Your goal is to find someone who will work day and night to find that great deal for you. The reason they're going to work so hard for you is because they know that you have financing already lined up from your hard money lender. You are motivated buyer who was able to get to the table to purchase a property quickly so they value your business as a side note. Don't let your lack of money and or your lack of time discourage you. The best thing about this business is that very few people have both the time and money, so there's always a need for partnerships. If you don't have the money to put down for deposit or feel the house, guess what? There plenty of folks who do and who would love to partner with you to get a property fixed and flipped. I've added additional info to this course about how you can achieve your real estate goals . Do you mutually beneficial partnerships 8. Criteria for Evaluating a Property: Now that you have your financing lined up and you found a good real estate agent and or wholesaler, it's time to create a criteria that you will use to judge whether a deal is good or not. I like to summarize this as the three C's approach, that being you're looking at the condition, the cost and also the cops for property. Let's start with the condition. If you are a beginner level investor, I would recommend that you start out with the property that does not need much work. That means that you will want a property that needs Onley, light renovation or cause medics, for example. The ideal house will be one that needs maybe just carpet pain, interior doors and fixtures. As you become more advanced, you can take on properties that need new H vac systems, extensive electrical plumbing repairs and things like that. But for the time being, let's focus on basic cosmetic rehabs. So I know you're probably thinking if we have the GC during the work, why does it matter if we don't a light rehab or, you know ah, heavy, full gut rehab? Well, I'll tell you, for the first dealer to. If you're a beginner, I do not think you should do a full got rehab. It's more than just who's doing the work. You understand when it comes to the general contractor, you want to maintain control off understanding and having a high level of awareness of what kind of work is being done on your property. If you've never done a deal before, you don't want to bring in too many variables. With that being said, You don't wanna have a situation where you're redoing electrical and redoing plumbing all under the work of the GC, because you may not be as aware. Get your feet wet. Do a dealer to start off having deals that involve light paint, carpeting, you know, maybe even light. You know, renovations of bathrooms, but not anything that's too heavy involving too much wiring or plumbing and things like that. So I would say, start off slow and really get used to the business before you dive too deep into a big major project. Now, when determining the condition, you also want to ask yourself how much work with house need to get it back up to full value . We call this the A R V or the after repair value. Most heart money lenders like toe lend, based on 60 to 65% of the R V. For a house with an air V of $200,000. That means that lenders will usually Linda anywhere from 120,000 to $130,000 toward the purchase and rehab for the property. If you're able to get the property for 80 K and fix up is about 30 K adding another 10,000 for fees and get in that about 120 K that the hard money lender will be willing to finance . This leaves you with an expected gross profit of about 80 k From this figure, you'll deduct any holding costs, sales costs and fees that you'll incur from the projects. Now, later on in this section, I explain the calculation of fees a little bit deeper. Okay, so this is the point where your heart money lender and your general contractor will come in handy. You need to figure out what percent of the after repair value your heart money lender is willing to lend, and after you have that figure you add in the cost for the rehab that your general contractor provides you. Now, the way that you'll find your A R V at the repair value is about calculating the cops in your area. Now cops is a term that we use in the business to refer to the comparable values. In other words, we're looking for three Apple to Apple, which means similar comparisons of houses that sold in your immediate area within the past six months. Now houses that are currently for sale that have not sold yet they don't mean much to us reason being anyone can ask any price for a house, the question is, Did that how cell Yet at that price, another important factor that were concerned with when it comes to evaluating houses and comparing them against one another is how many days were the houses that sold in the particular market on the market for? We call this the days on the market. Now you'll use this as a gauge to gauge how long it may take for you to sell your house when is actually fixed up a swell. So keep in mind that houses they're going to sell for varying amounts of time, depending on things like the weather in the season and all that good stuff. But at the end of the day, we can rely on our real estate agent to run comes for us all so you could run calm to yourself in the written section of this course, I provided more information on how you can go about running, calms and where you can find tools to help you run better comp set and a lot more detailed information on cops in particular. So take a look at that after this section's over. 9. Making an Offer: now, after you found the house that you're interested in, it's time to put together your offer. The key to making money in real estate is that if you don't find a good deal, you don't buy period. You wait until a good deal comes along and you continue to search. You should not allow your emotions to drive you into buying a questionable deal. You need to be able to clearly achieve your desired profit with some cushion to spare. Trust me, you'll thank me for this advice in the future. The idea here is that after you set your expected profit, you're gonna want to submit an offer that's going to allow you to achieve this profit after the house has been fixed up and sold. Now in some areas of the U. S. There will be opportunities to make more profit, especially in areas where there is not much competition from other investors. So if you're working with the wholesaler, then usually you'll have a built in profit. What I mean by built in profits that the wholesale has already worked with Seller to get a good sales price. Now, having that good sales price won't allow you to complete a profitable fix and flip deal. You can negotiate for a few 1000 but for the most part, a good wholesaler will be passing on a decent profit to you already. However, when it comes to submitting offers through your real estate agent, bank owned foreclosures have MAWR run for negotiations. I would recommend in this case that you gain the advantage with the banks by letting them know that you can settle quickly and have cash. Since you're using funds from your heart money lender, often times the bank will look at this is cash compared to competing offers that are coming from traditional Homebuyers with traditional funding. This is great for you. Also, the benefit is that your heart money lender can generally settle as soon as two weeks and sometimes even as soon as one week. Based on completion of the title work, you want to structure the price of your offer in a way that allows some or than your projected profit. By working with your investor friendly real estate agent, you'll be able to craft an offer that will be submitted to the seller's agent and ultimately to the seller I mentioned earlier. When you're submitting lowball offers, the majority of them will not be accepted. And that's fine. You know, don't get discouraged because all it takes is one lowball offer to get accepted for you to have a great deal or your hands and a lot of potential profit. 10. Deal or No Deal Prop 1 v2: Okay, so now we're going to play the deal or no deal game in this video, I'll show you exactly what we do when we go out to scout for new fix and flip deals will walk through the House to get a sense of what repairs need to be made to bring the house back up to the after repair value. Now, based on the amount of repairs that it needed, will estimate how much these repairs will cost us. Finally, will take a look at this Sefo to decide if this is a deal or no deal type of scenario. So here's property number 13 bedroom, 1.5 bathroom house with about 1288 square feet. It has decent curb appeal needs some basic landscaping, but that's minor. I'm more concerned with having the bars removed from the front window. There's something about having bars on the window that makes potential Homebuyers. I feel that the area just isn't safe. In all actuality, this house is in a decent area, so my guess is that the bars have probably been on for years, and the previous homeowner just never took the time to have them removed. Okay, so now we're in the living room area. First thing I notice is the floors floors look terrible. We're gonna want to put down some hardwood floors to make it look nice. We're going for high end rehab here, so I want to make sure that we have high end things throughout the house. Uh, next we have the windows when those look decent. But overall, once again, high in rehab, we need brand new windows. We can take those bars down. And when we put the new windows, that will put new trim around as well. Here we have the fireplace fireplaces. Decent will probably just clean it up a little bit. Okay. As we look around the room, we see some imperfections on the wall. Not a big deal will patch it up, throw some paint up there. But if it's too much and the walls to deteriorated, we'll get some new drywall. Throw it up there. Not too expensive. So that's a very minor thing. Moving on into the dining room area. We see dark color paint, so of course, we're gonna come through and re paint the whole house. So that's not an issue at all. Same issues we had in the living room, though when you look at the windows, you see their old and outdated. We want to get brand new windows throughout. Take those bars down also. We see like a little chandelier there. Want to get a new chandelier now, moving on into the kitchen. So here in the kitchen, the first thing I noticed all the cabinets, cabinets need to be ripped out. We need to put brand new cabinets in. Same thing to sink and appliances. We want to go through have granite countertops over type of those cabinets. We want stainless steel sink. We want stainless steel appliances. We want everything in here to look brand new and more modern. Now, before we go downstairs, we're gonna go ahead upstairs to take a look at the bedrooms and the bathroom upstairs as we walked back. Noticed the heating sources radiant heat. So we have radiators. We're gonna swap that out and put a whole new H vac system and see this door right here. Want to get rid of? We're gonna put all brand new interior doors throughout the paint inside of the closets. His little view of the backyard. It's a little bright towards the end of this video will go out in the backyard and get a better view before we could see. Here's a nice size backyard. Here. We see the stairs were gonna need new stairs and railing so that something else will go through and do. Once again, we'll probably put new drywall here because the drywall appears to be very damaged. Okay, we're gonna need a new window right here. But once again, we're going through the whole house and replacing all the windows in the house. Here we go upstairs. Look like the addict is open. I can't really see much up there. Okay, so right now we're gonna go to the bathroom first immediately. Noticed flooring needs to be changed. Of course, the painting tiles sink. So we're gonna redo this whole bathroom all over. Noticed old lighting the old mirrors. Once again, the radiant heat typically will come and will gut the whole bathroom and put up a nice new modern design. Okay, now let's move on to the bedroom. A lot of times, the bedrooms all need the same stuff. One good thing is this has nice hardwood floors so we can go through and refinished the hardwood and give it a really nice look. And it won't cost us too much more. Once again swapping out all interior doors. Gonna replace all these doors of brand new doors. Windows once again will be replaced. Closets will go inside. Either repaint or throw up new drywall. Probably throw up new drywall to give it a nice, fresh look. Repaint the walls. Replaced. Trim. Right now we're moving on to the next bedroom. All right, so now we're going into the other bedrooms. The more take a look at these walls, the more I realize that we're really gonna need to go through and put up new drywall throughout the whole house. We're going for the high end rehabs. We don't want to cut any corners here. Want to make sure everything is pristine. All right, so now we're done upstairs, we're gonna make our way back down to the basement. Okay, so now we're gonna head down to the basement. You just saw right there. We need a new light fixture. Not a big deal, because we're going throughout the whole house, replacing all the light fixtures right here. Used to be a door. There's not adored him or we're gonna put a brand new door. A Zoe walked down the stairs, take a look around notice we're gonna put new steps in here Overall. Look at the condition of the basement. Looks really, really rough. So we're gonna go through and frame out the whole basement and put up drywall and really finish it out here. We have old water heater. Uh, right here we have the old heating source. We're gonna remove all this. So what happens at the beginning of every single project we have what we call the demolition face during that phase. Our demo crew, they come through when they pretty much take away anything we're not gonna be using during the project. So, for instance, in this case, they're gonna take the heating source out. They're gonna take out the old kitchen to consider the old bathroom pretty much knocked down and clean out the place. So what's his bears possible? So we could begin rebuilding back up again. Now, here you noticed the walls in pretty bad condition, but that's not a big deal. Our plan here is to go ahead and frame without as I mentioned before. We're gonna frame out the basement and throw up some drywall. We're gonna finish out the basement, make it look really, really nice. All right, here we see the electrical panel. We're gonna have our electrician's commented. Just take a look and make sure there's no upgrades is needed to the electricity in the house. Right here. You see some electrical boxes hanging down, and that's pretty typical when you have a rehab like this. So the electrician will check into all of that for us. In addition to that, we were checking around for right now in the basement. We're looking at the pipe, and specifically, what we're looking for here is to make sure there's not any major missing pipes or anything like that. And if so, we want to factor that into the cost. We're gonna pay for this rehab. Okay, so we're moving on to the backyard. As you can see, the backyard has a decent sized to it. I need some landscaping in the back. Right there. Far, far in the back. You can see we might need to put a gate kind of like the neighbor has back there. So we're gonna make sure is very aesthetically appealing when we're all done. So shouldn't be too hard. We have a lot of space to work with, and we're not gonna do anything major in the backyard. Our goal just to make it look nice. Okay, so now that we're all done looking inside the house, I pulled up a couple cops. Now, this is the first cop I noticed this compass, three bedrooms and one bathroom. If you think back to the house we just went through. Even though it was listed as having 1.5 bathrooms, I didn't see that second bathroom. So in the previous house, we're gonna need to go through and add a bathroom in when we finish off the basement. Now, this house is slightly bigger. The other house we were looking at was about 1288 square feet. This is about 1360 square feet, but it's still in the same general area. Now, the distance of this house from the other houses literally one block away. It's one street over And this house. So within about the past three months, the sales price for this house was 180,000. So that's a pretty solid cop. So overall, this was a very good cop. It was a very high end rehab wood floors throughout and also granite countertop as well. A stainless steel appliances and a finished basement. So this is a very good com for our deal. Okay, so now when we went on to our second cop, if you notice this house is very similar to the other two houses in this case there's three beds, 1.5 bath, 1288 square feet. The distance of this house from the first house is two blocks away, and this house so within the past nine months. Now, typically, we want houses that so within the past six months, that's our ideal comp. However, in neighborhoods like this that are pretty stable, there's not a lot of homes being sold. So it's OK if we find houses that were sold, say, nine months ago. And the big question when it comes to cops is how is the market changed since that comment was sold in this case, the markets went up, so that's a great thing. And the final sales price with this house, just like the first cop is 180,000. So that lets us know 180 thousands, pretty much to silent comp in this area. Okay, and moving on to our third and final comp. We have a townhouse, and this is actually a three Barham 1.5 bath towel house that's located about 0.3 miles away from the other houses. Now this house is 1360 square feet. So it's a little bit bigger than the house that we're looking at one huge benefit of this compass, that it's so within the past month. So it's very, very recent. Now, the sales price of this Kant was 160,000 so it's not quite as high as the other houses that were 180,000. However, keep in mind, this is just a townhouse in the same areas, other houses that are detached houses, so you gotta take into effect the fact that detached houses are worth a lot more. So I think this is a good third comp, since there's no other cops in the area, that soul within the past six toe, nine months. Okay, so now we've identified three comes for this property. Let's take a closer look at the financials for the holding cost. We always assume that the house is going to be held for about six months. That allows us about 2 to 3 months to have it fixed up and 2 to 3 months to have it on the market. Worst case scenario. So in this case, the holy costs are about $10,000 and now we got the $10,000 estimate from the fact that we're looking for a $90,000 loan at about 15%. So that's gonna come to about 11 25 per month. We then estimate the any utilities will cost about 300 a month, and Builder's risk insurance will run us about $100 a month on this property. Now we estimate the closing costs at about 20,000 so the way we estimate that is refigure were buying the house. The loan fees and the points based off the $90,000 loans will be roughly about 4.5000. The recreation, the transfer admin, a lot of miscellaneous fees we based it off about 5% of the purchase price. What's going to come to about $2000 or so? And now, when it comes time to sell the house, we know because of the state that we live in, that 6% of the sales price will have to go to the real estate agents. So we estimate that the A. R. V is gonna be about 1 70 So based off of that will pay about $10,000 to the agents. Now, as far as miscellaneous costs, you can never really calculate those. So we factor in about 2% of the sales price, and in this case, that's about $3.4000. Okay, so this point, we're gonna estimate our profit. We want to get the expected profit and the way we get that is by taking the sales price or the after repair value, which is what we're estimating it to bay. Then we subtract the purchase price from that with attractive repair costs. From that, we subtract the holding cost from that, and finally we subtract the closing, and the sales costs in this case comes to about 51,000 now in the next slight. I'll show you exactly how I got that number. All right, so now we're at the point where we need to decide. Is this a deal or is it not a deal? Now? The purchase price was 34 9 I'm recommending in this case that we submit a full price offer for 35,000 reason is Seems like the cops are pretty solid and we'll get into that Maura little bit later. But the repair estimate that RGC came back with was 50,000. So in this case, I recommend that we a lot for $55,000 worth of repairs. Reason being is if your labour materials 50,000 you always want a factor in an extra 10% of . So just in case something doesn't go right in the project. So we have repair estimates of 55,000 r A r V is going to be about 170 k and that's a very conservative figure. Reason being is we had two solid cops at 1 80 however, we couldn't get enough cops, you know, we had to find another call for 1 64 townhouse. So let's play a conservative, Even though I strongly believe we could get 1 75 to 1 85 on his property, we're gonna say 1 70 just to play it safe. And as for the hard money loan, hard money lenders typically lend 60 to 65% of the RV, which in this case would be 102 to $110,000 Max. However, in our situation we only need about 90 K given the purchase price of 35 repair estimate of 55. So we're gonna go for hard money loans of about 90 k So now, when we take all of our expenses and the holding cause, repair costs, the purchase price and everything into consideration, we're looking at about 51,000. But that could go as high as about 60,000 expected profit for this deal. Now the reason why we can expect more profit is because we were very, very conservative in our calculations. So we estimated the A R V is gonna be 170 k What if it comes in at 1 75? What if it comes in 1 80 also at repair expenses. We estimate it will spend 55 based off of the estimate and based off the average. What if it comes to the 50 as we were quoted? And also the final thing is the amount of time we held it, we estimate will hold on to it for six months. But hey, what if we haven't gone in four months? Total will save money there. So the main lesson that I hope you take away from this deal or no deal property number one is that it always helps if we're very, very conservative. Being conservative can only help us from losing money. We never want to lose money. Whenever you invest, you never wanna lose money. So every step of the way, you want to factor in over edges. You want a factor in assume there's been more time. You want a factor in the lower sales price. That way, you're happy when you get more. Okay, so we've completed this deal or no deal for property number one, and overall, I must say, I feel this is definitely a deal. And the reason why this is a deal for me is as an investor my goals to get anywhere from 2025 K to 40 k off every property. So if I have an opportunity to get 50 K then hey, I'm all over it. And in this case, I think this is a fabulous deal. 11. Fixing Your Property (Section Intro): when it comes to fixing your property. The good news is that you would not need to actually fix anything. Your job is to find a general contractor that you work well with and who has a proven track record of completing quality rehab projects. In this section, you will learn how to identify a good general contractor. Since the idea of this course is viewed a leverage the expertise of other professionals, we will have the G C provided detailed scope of work, project plan, payment, schedule and contract. It will be your responsibility to review and request that changes of May in these documents to assure that the conditions are favorable for you. I will give you info on what the important pieces of each document are that should pay attention to. I will then provide your tips on working with the general contractor and how to successfully finalize the project. I will then take you on a walk through of projects that we have either done in the past or currently working on to help advance your learning. As a side note, I've updated discourse with a lot of extra information, and I continue to provide info based off of the things that you all expressed to me that you would like to learn more about 12. Selecting a General Contractor (GC) - Sources: So let's talk a little bit about how you're going to select your general contractor. I wish this was simple, and I could just point you a one place where you can go and find the perfect GC. But in this business, that's just not how it works. I've talked many other investors, and most have been burned in some way at some point by a G, C or a contractor. Now I don't want to scare you, but I want to prepare you because if you're in this business long enough, it's likely that you will encounter these types of issues. And, believe it or not, it's not always a GCS fault. Sometimes, as investors, we need to do a better job communicating our expectations to the G sees as I'll mention several times throughout this course, this business is built off of relationships and partnerships. At the end of the day, we all need each other to make money. Now, with that being said, when it comes to locating a G C, you should always check with trusted investors, family and friends first. The benefit here is that you can get a look at the quality of the work. You can also get an idea of what the GC charges, and you can also get an honest referral of whether the contractors easy to work with or not . If a personal referral isn't possible in your situation than a referral from members of your local Real Estate Investors Association is the second best option, oftentimes their general contractors that work very closely with the local group of real estate investors. This is helpful because this GC has a good reason to do a good job so that he or she can maintain a great reputation within the local real estate community. The next option that you should consider is driving around in areas that have a lot of residential renovations happening. You will likely see various contractors working often times. If you explain to them that you're a real estate investor that's looking for new contractors to work with them, they will gladly show you the work they're doing in the house. If you like what you see in that house, you can. Then, after they put you in touch with their GC as a last resort, if you can't find the GC in any of the ways that I just listed, You may want to check on either a website like a Angie's List or Craigslist. The reason why list he cites last is because from my experience you confined great contractors from these sites. But you can also find equally bad contractors. The problem is that a general contractor leave from these sites. They have no connection to you. They aren't being recommended by anyone's you trust, and you aren't seeing them doing their work. So you'll have to rely on the fact that their license and a reputable business and that they're providing you honest referrals and accurate details in their prior rehab work experience. So you're truly taking a chance, and as a new investor, you wanna limit these types of chances. 13. Selecting a General Contractor (GC) - Property Walk Through: now, after you found several potential G sees your one of reach outs them to set up a time to me to kill two birds with one stone. I recommend that you have the initial meeting with your G sees at a house that you're interested in rehabbing one quick site. No, here. Now a good GC stays busy and will likely be occupied working with his or her current investors during the day. However, if it takes you more than 24 hours to get a call back from a GC, then that could be a good sign that that GC is overworked or very hard to get in touch with . Now, this isn't a hard rule that the G C must call you back in 24 hours. But I will pay close attention to the responsiveness of the GC. You see, once you have the GC on the project, you want to make sure that the lines of communications stay open. So you're constantly updated on the status of your project. If it takes the GC days to respond to your initial communications, then that may be a good red flag that you should avoid doing business with that G. C. Okay, so you want to meet with each potential GC separately, But before meeting with the G. C. You need to go through the house and make a list of all the improvements that you feel need to be made to bring the house up to the RV. Now, remember, in order to get the RV, you need to run three quick apple to Apple cops on the house that you have an interest in. This will also involve you checking the old sales listings and pictures, either through the MLS or in real estate sites such as Redfin or Trulia. This will give you an idea of what upgrades the houses that sold had in them. So you have a little bit of homework to do before meeting up the GC. But don't worry, you could knock this out in less than an hour. And just remember, this is part of the reason why you see the big payday when your house sells. Okay, so after you prepare the list of needed repairs, you'll give that list to each GC that comes out to see the house. Now, during your meeting at the house with the GC. You have several goals. Number one. You want to assess their personality. Ask yourself questions like, Is this someone that I feel I can work well with? Does this person value my input? Do they answer my questions precisely? Or do they give vague answers and avoid giving specific details? Do they ask me good questions that show that they understand my project and that they're concerned with making sure my project is completed properly? Number two. You want to assess the level of knowledge and creativity of the G. C. So you provide the G C the list. So now pay particular attention to any design modifications or additional ideas that the GC could provide you on how they would improve your property. And while they give you this information, be sure to take notes. You will be amazed how much you will learn by just talking with several G sees who come out to see your potential property. More importantly, this is a great time to gauge if that GC is comfortable of doing this rehab. Also during this meeting, you want to get a feel for if the G C can see your vision for this property. It's very important that the GC is capable of rehabbing this property so that it meets and or exceeds your expectations. Number three. You want to request information from the GC specifically, you want to request that the GC send you a follow up email with their references, licensing, bond and insurance information, as well as the addresses and or pictures of work that they have done in the past. A lot of investors skip over this step because they find that they have a great report with a particular GC, and they like the quality of the work that they have done in the past. That's the quickest way to get burned in this business. Ronald Reagan once said that now famous quote trust, but verify that couldn't apply mawr to selecting a good G C and number four. You want to request a quote from the G sees, so if you're happy with your initial meeting with your GC at the end of that meeting, you should request that here she provides you with the basic quote. Now this quote should detail the price, which includes labour materials, the scope of the work to be done and also the estimated time to completion. Since you're likely going to go ahead and submit an offer on this property, make sure you let your G sees no, that your bidding this job of several other G seas and that you'll need to receive all quotes within 72 business hours or sooner. As with all other communication, you should be paying particular attention to just how quickly the GC is able to get this quote back to you. Also, be very cautious on working with the GC. If this GC goes, Pastor stated deadline for this quote. Now, after you have received all the quotes back, it's time to select the G. C. I recommend that you choose to GC that you feel has a good personality fit for you, the one who does high quality work and also has fair prices in that order. The reason why I place prices last is because of the personality doesn't fit. Working together will be difficult. You'll end up paying more money in other areas as breakdowns of communication come about. As for quality, there's nothing worse than a poorly rehabbed house. Poorly rehabbed houses either don't sell or they sell for far below the A R V. Poor quality isn't an option now. When it comes to price, it's true that you often have to pay for high quality work. The good thing is that if you get the property at a good price and a RV is good and you run your numbers and you can easily achieve your expected profit even after you add in over, just don't try to talk a good GC down too much. The GC is probably one of your closest partnership relationships in this business, so you need to maintain good business dealings with this person. So once you have narrowed down to the GC that you want to go with, you need to do your homework on their business. This is the time when you call the references, and also you check with the local state or city Home Improvement and business licensing resource is to make sure that GC is in good standing and also registered with the appropriate licensing bodies. If you aren't sure about the proper licenses that are needed for your area checking with your local real estate investor association and they'll be able to provide you with this information. If all the references check out and the business is legit and doing good business in your area, you could give the g C a call to let he or she know that you'd like to work with them on the deal. You should let them know that you will be in contact with them in the coming days and weeks after you've acquired the property. This is also a good time to give a courtesy call back to the G sees that you decided not to work with on this deal. Keep in mind that time is money and these GC spent a lot of time with you discussing your potential property. The professional thing to do is to follow up the G sees so they aren't waiting to hear back from your regards to this deal. This business is so small, so you don't want unintentionally burning the bridges, especially since you never know when that person could be of assistance for you in the future deal 14. Reviewing the Scope of Work, Project Plan & Payment Schedule: so after you've walked through the property with your selected general contractor. But before you sign the contract, it's important that you request that the G C gives you a detailed scope of work. This scope of work should include information on all the work that needs to be done in the house. This should also detailed the permits that need to be pulled during the project. You can request that the GC itemizes the materials that need to be purchased based on the work that needs to be performed. This means that the GC needs to include information that will allow you to determine the type or quality of the materials that are being used. For example, instead of having the GC stayed at, the countertops will be replaced in the kitchen. The G C should say that the existing countertops will be replaced with granite countertops . The idea is that you don't want to be stuck in a situation where you end up with low quality materials when you were quoted, a price that you felt would include high quality materials. Additionally, your statement of work should detail any demolition or clean up work that's needed, along with the associated costs movie going to the Project plan Based on the scope of work , your GC should provide your plan to details how here she will guide the work through to the completion of your project. The key elements of your project plan should consist of the start date, critical milestones and also the ending. Additionally, the project plan should include detailed information listing the order that work will be performed during the renovation. This plan should also include details on what days the subcontractors will be on site working. Okay, now moving on to the payment schedule based on the scope of work and the project plan, you should request that the GC submits to you a recommended payment schedule. You will evaluate this payment schedule based off of two main factors. One. Will it always keep the work in front of the money was just means that the G C has performed more work. Then he or she has been paid for, which ultimately serves as a financial incentive for the GC to complete the project and two will you have enough money to pay the GC based off of you receiving draws from your lender If not. You'll have to work with the G C to adjust the payment schedule so that allows you to get time to receive the money from The lender will discuss the lender inspections and payments later in this course. 15. Reviewing the Contract: Now that you have selected your general contractor before the subcontractors can begin work on your property, you will need to come to an agreement that defines all of the costs, work terms and conditions relating to how the GC will complete your projects. This is all defined in a contract that would need to be signed by both you and the G C. Typically, the GC will provide you a written contract that outlines all of the important details relating to how he or she will complete your projects. If you have the means, I've recommend that you have this contract reviewed by a lawyer who can make sure the contract protects all of your best interests. If consulting with a lawyer is not possible, the here of field the basic things that you want to make sure that GC includes in his or her contracts. One. The contractor fo the contractor should have information such as his or her full name, business name, physical home or business address, and also their license, bond and insurance info. The benefit of having this information is that in the event that things do not work out and you need to take the GC to court. You already have the information that you need to file a case, not to mention having this information shows you're working with a legit contractor. Additionally, you should request to see the contractor state issued I d to verify the here. She is who they claim to be number two. The contract should include a fixed cost. It's important that the G C list the cost that will be charged for labor and materials in the contract. This will allow you to peace of mind and knowing that the contractor won't be able to change their mind on the pricing after they've begun the work and suddenly decide they deserve more to complete a portion of the project that they feel is harder than they had previously expected. Now, trust me, I've seen this happen before, and it doesn't make for a happy customer that leads us to number three. Your contracts should include information on the responsibilities of the owner verse, the G C. This should outline information such as if there's a situation that arises worse, discovered that extra work is needed. Who was responsible for paying for this? And is the responsible party responsible for paying both the labour and materials? Or will these costs be split between the owner and the G C? Other issues that should be outlined? His things such as? Who should be responsible for pulling and paying for permits? Now? Many investors don't take the time to outline these types of things, and it can lead to hundreds or thousands of dollars in charges that could have otherwise have been avoided. So take the time to discuss this with your GC prior to signing the contract number four. You want to make sure that the full scope of work is included within your contract. You want to make sure that GC is fully captured all the work that it takes to get your job done. In addition, you want to make sure that you're aware of the quality of the materials that the GC plans to use. The best way to do this is to get the GC to list out the product names and also the numbers for the major items that will be purchased during this project. As you begin to use the same G C a few times and you have a good working relationship this may not be needed, but for the first few deals, I'd highly recommend that you require the GC Include the product details on the materials that will be used. Number five you want include a project plan. It's important that the contract includes the project plan that UGC is planning on using to guide this project to successful completion. They should include key project information such as a start date, milestone completion dates and also the date of completion. It should also include either a written and or visual component that describes the order of the details and the order of the work that will be completed. This will be useful with the project goes south because it will allow any arbitrator, jury or judge to determine if the G sees work was done in a manner that was consistent with the project plan or not. Number six. You want to include a payment schedule within your contract so you and the G C should decide on when, where and how the GC will be paid. It's a good idea to base payment off of completion of a milestone, and at a selected due date, the initial deposit should be minimal and just enough to allow the contractor to start the job. This is usually anywhere between 15% and 33%. I think it's best for you to provide the least amount of money upfront as possible. The idea is that if the G C has too much money already, what financial incentive do they have to finish the project now? A Good GC should really have credit that will allow him or her to get the materials for work prior to you paying them. So always make sure you never allow the money to get ahead of the work. And what I mean by that is, for example, if the project's only 50% complete, you should never have paid the GC 80% of the money already. When the projects all complete, you've done a final walk through and everything looks good. You should pay the GC the final payment. We'll talk a little bit more about the best practices for payments in the following lectures. Number seven, you should have a part of the contract, specify how disputes will be resolved. So if and when you run it toe unresolved with spirits with the G say how you all go about resolving them when you go to an arbitrator or when you take the case to court, they should be spelled out clearly and agreed upon in the contract and finally within your contract. It should be clearly stated what type of contractor warranty you provided. So this is an important one. If you deemed the work is done effective, will the contract to cover this many states require that your GC provide a warranty for the work that here she performs. So check with your contractor and then check the particular laws for your state enclosing. Remember that before you signed the contract, you have the right to request a change to anything that the G C has listed in the contract . If you can't come to an agreement and the GC refuses to work with in terms, you feel comfortable. Make sure you do not sign that contract, and you should begin searching for a new G C to complete your project for you. 16. Working with your GC - Involvement & Communication: now that you have a gun GC onboard and here she is aware of your expectations, the question becomes, How do you manage this manager? I'll tell you, it comes down to staying involved and maintaining open communications. The G C knows how to get the project done, and he or she will hire the subs that it takes to successfully complete the job. However, understand that no one else will care for your project like you will. This is your baby, and you have to treat it that way. Now you would need to show your involvement in this project by making both planned and unplanned site visits while on site. Make sure you show interest in what's going on as plenty of questions. And be sure to point out any concerns that you may see to the GC. Now you want to stop by frequently enough to let the G C. Know that you care about the project, but not so much that you get in the way of the contractors trying to do their job. In addition to site visits, you want to schedule weekly calls for status updates to make sure everything is going as planned. request immediate phone calls whenever there's any event that occurs that has the potential to change any milestone completion dates. If you show a lack of interest in your deal before you know it, you'll see the quality of the deal begin to fall apart. So be sure to stay on top of that now. Few basic rules that you should always follow is you should never mention pricing around the subcontractors. See the cells report directly to the G. C. So you should respect the GCC authority over his and her crew and let those types of discussions stay between the G C and a sub. Also, never, ever discuss expected profit with your GC. Even though your relationship with the GC is a business partnership, they're not your business partner. If that makes any sense, I know investors that learned lesson the hard way. After these investors mentioned the profit that they were expecting to make in front of the GC, suddenly, the GC felt that he and his team were significantly underpaid. Let's just say that was a very costly lesson for the investors toe have to learn 17. Working with your GC - Lender Inspection & Payment Draws: In addition to maintaining open communication and visiting your property to make sure workers going is plan, you need to oversee lending inspections and paid the GC and draws as a condition of your hard money loan. The Linda will provide you a set amount of money to rehab the house now. Earlier in this course, I recommended that you pay your GC based on achieving certain milestones that correspond to certain dates in your project. There was a good reason for that. You see, many lenders will set up a payment schedule, and we'll pay you and drawers based off of achieving certain milestones in your project plan. The way this will happen is that the lenders will require the lender inspections take place prior to these payments being made to you. Many lenders will give you a set amount of drawers. Ah, common amount of jobs that I've seen lenders give its three drawers, so you'll set a town off the lender when he or she will come out to inspect the house. The Linda is basically looking to make sure that contractors work is up to pace with the project plan Now. Typically, lenders would do a quick walk through, and as long as everything looks good there, right to check out to you on the spot. As a side note, lenders were usually charging inspection fee for these inspections have typically seen lenders charge anywhere from 75 to 150 bucks. Now there's times when the lender may not feel that the GC is completed enough work to cut the check. That's a good thing, because you can use that as additional leverage and incentive to get the GC to get back on schedule. But it's also a bad thing because you still have to pay your lender inspection fee, and you need to pay it again when the lender comes out. So when it comes to review in the contract, you want to make sure you take into account the fact that you would not be able to pay the GC until you receive the drawer and plan accordingly. You'll also need to add wording that would make the G sees responsibility to pay the lender inspection fee. If the Linda needs to come back out due to negligence by the G, say 18. Finalizing the Project: after your GC and his or her subs have just about completed all of the items on the project plan. It will be time for you to go through the house to do a walk through to see what remaining items may have been overlooked. We're not done to your level of satisfaction. This is what we call creating a punch out list. Ideally, you should not have too many items on the list since you've been doing your occasional site visits and having frequent calls with the GC. However, completing a rehab involves a lot of attention to detail, and small things are always missed. I recommend that you take someone with you when you go to compile the punch out list. Ah, fresh set of eyes from someone who has not seen the house yet is usually very helpful. The things that you want to look for, anything that a prospective Homebuyer make catch. It could be something as small as a crook, a tile in the bathroom or even lopsided cabinets. This is the time when you need to find any and everything that the contractor will need to correct. After you compiled this list, you should review it with the G C. The G C will then either acknowledge and make these repairs or here she will dispute them based on the contract. If the repair that you're requesting was not outlined in the scope of work portion of the contract that you need to pay the contractor to make that repair after the contract has made all the repairs, you'll take a final walk through to make sure that all the repairs have been made and that you're satisfied with the completed projects. If you are satisfied, this is the time when you should sign off on the project and pay the GC his or her final payment. Congratulations. You have finished to fix up portion of your deal. Now it's time to get it sold. 19. Site Visit of a Rehab Property #1: Okay, so here is the house that we've rehabbed, and we're about to sell it closing in a few weeks. So let's take a quick look at some before pictures. This is the picture of the dining room. After we finished our demo stage, here's a picture of the dining room overlooking the kitchen. Noticed the wall that divides the dining room from the kitchen. We ended up taking that down. Here's just another picture showing another angle where we're standing in the kitchen and looking out towards the dining room. Now we're upstairs. This is a picture of one of the bedrooms. Notice the nice wood floors will be cleaning those up and re finishing them. Here's a picture of the bathroom Before we complete the demo. Here's a picture of the bedroom after we complete the demo. Now here's another picture of both the bedroom and bathroom. After we completed the demo, we opened up the wall and reframe the bathroom to make it larger. Finally, here's a picture of the basement. We wanted to add 1/2 bath to increase the market value of this property, so the contractors had to do some digging to get that at it. Now, let's take a live walk through of the property a few weeks after our contractors have been working. But we're here on site right now. Contracts actually working. Uh, what you have here is we have the brand new door. We have the brand new six panel, uh, closet door, Have Ah, brand new base. Boise painting right here. Made a little touch up. For the most part, pain is done. We have the recess lighting up here. Ceilings right there. We have crown molding all around, so let's walk to the kitchen real fast. How you doing? Hey, we have new windows in the back right here. We have brand new backdoor contracts actually working right now on the floor floors. Come along. Well, we can't get down to the basic right now. They work on the basis, so we're gonna go ahead upstairs in a moment. All right? One of the culture. I just take some drywall upstairs. We have paper here on the floor that with a good hardwood floors don't get messed up. Just a quick looking bare rooms saying situations downstairs. We have the brand new baseboards. We also have pound wall paint baseboards walking here. We have rated closets. Are there still in the closets? Right here. Shells for the closets. Brand new windows as you could see it. Very good. Paint job throughout. Uh oh. Here. Life is gonna go up here. We're here. We have the six panel brand new six panel doors and the last thing they actually working on the bathroom right now, that's all for this house. Okay, so after a few months of working on the property, here's our final pictures. First, you're going to notice the recess lighting in the hardwood floors here in the living room, we put up a new door, and we intentionally did not place blinds or curtains in the living room. Since this house has a nice view of the park out front now, remember that wall that was between the living room and the dining room? Well, we had that knocked down. We added an island also noticed the dark cabinets, stainless steel appliances and a granite countertops. Our goal was to make this a kitchen that prospective Homebuyers will fall in love with. And ultimately they did. Moving on to the basement. You're going to see the sump pump. The half bath washer and dryer also once again noticed a recess lighting and the carpet, which really gives this basement of warm field heading back upstairs. You see, we have a nice closet as well as a nice finished bathroom. So to summarize this deal, this is a town house that we purchased at the end of the last summer for about 50,000 replaced it on the market the end of December and got a contract on it for about 1 35 Within several weeks, we spent roughly about 50 K for fix up and also fees. So we're looking to clear about 35 K on this deal When we settle in a few weeks the homes about 1200 square feet and located in a decent home owner neighborhood, we added new H fat hardwood floors, recessed lighting throughout. The kitchen has stainless steel and granite, also a center island. We improved the basement as well. Originally, this was a three bedroom, one bathroom home, and we converted to a four bedroom, 1.5 bathroom home to get closer to our expected a RV, which was about 1 30 k 235 k 20. Using your Real Estate Agent to Get Your Property Sold Quickly!: Now that you've successfully made it through your final walk through, it's time to sell your house. There are many ways you can go about selling your house. You can put it up for sale by owner. You can auction it off or you could even do a lease option to buy. For the sake of this course, I'm gonna recommend you use a real estate agent. The main reason is that the entire system that we've used up until this point involves having various professionals do the work for you. As a strategy of this works well because it allows you the peace of mind and knowing that you could continue with your daily life with minimal hands on involvement needed, you're simply managing the entire process. So now is the time when you give your investor friendly agent a call toe, let here she know that it's time to get your house. So to get your house so quickly, here's what I recommend you and your agent do. Number one offer a buyer incentive and buyer agent bonus. So take a look at your expected profit. If you've managed your project well up until this point, you should be expecting a nice payday. Now take into consideration what your monthly holding cost are. Now ask yourself, Is it worth giving up some of your profit to get the house so quickly and the save on holding costs? If the answer is yes, that you may want to contribute a few 1000 tours, the buyers closing costs and towards a bonus for the bias agent, work off your real estate agent to determine and decide if it makes sense. And it also there's any legal stipulations in your state on giving money to the buyer or buyer's agent. If it's a possibility and oftentimes is very helpful toe offering incentive and or a bonus number two, you're gonna want to stage your home. In the case where there's a lot of competing homes for sale in your area, it often times makes sense for you to stage your home. Basic staging involves making sure the home is well lit and smells good whenever there's a showing taking place. Now, more advanced staging involves furnishing rooms to help give potential buyers of field of living in the house. I've added some additional resources and information on staging after this lecture and number three. Finally, you may want to look in adjusting your price. Our goal is for you to get a sales price of the A R V or greater. However, if you're in a situation where you need to get the house so quickly and you can't wait, the lowering your price below the RV may present enough of a value to get a bite to move quicker and place an offer for your property. Work with your agent to make sure your home is priced competitively based on the other competing homes in the area. As a final note, remember, this house is a major investment until it's sold. You have the responsibility of keeping Vandals and or criminals from harming your investment. Some tips that I would recommend our most importantly to make sure you secure your property . For example, if your house is in a questionable area, you should look into getting a security system installed. You should also make sure to chain any gate shut with a padlock and also boat down the outside a C unit. Other things that you can do is stop by your house often, so people in the neighborhood are aware of your presence. Most importantly, talk with the neighbors and give them your contact information. Just in case there's any suspicious behavior, they can give you a call to notify you.