Posted by SCook85 on March 17, 2002 at 11:07:14:
Sadie,
I don’t always recommend that beginners make offers site unseen. It took awhile before I was comfortable with doing it, but I do it all the time now. Once you become intimate with an area and the homes in it then it gets easy. You also have to understand the types of rehabs that I do and it will make everything clearer.
As you know after reading my course, I would renovate homes that I could not wholesale. Well today my primary focus is on rehabbing. I still do a lot of wholesaling but I primarily look for homes to renovate myself. When I do a renovation I always redo the entire home. I don’t try to salvage anything. Based off of the size and age of a home I know whether or not it is going to cost me $15k, $20k, $30k or more to renovate. When I make my offers I base it off of these renovation numbers. The amount that it will cost me to renovate the homes the way that I renovate them. This does a couple of things for me.
First I wait for counter offers from sellers to see who is motivated. My offers usually come in pretty low because of this. If I get a counter offer that is in the ball park then I’ll go out to the home to get a better feel for the actual repairs and I may look at it from a wholesale perspective rather then a rehab.
If I can get a home in fair shape using my numbers it creates a lot of room for wholesale profits.
I like renovating homes that are trashed. I’m usually not interested in just doing a quick paint and carpet rehab. I know others like them and if I pick up a home like that really cheap, then I wholesale them and make pretty good money because I usually get them as if I were going to do $20k worth of work and someone else may be able to fix it for $7k. This leaves much more profit for me.
I hope this helps,
Happy Investing,
Steve