wholesale properties - Posted by Tony in Dallas

Posted by Gary - IN on July 17, 2003 at 22:54:04:

Absolutely! How can you make an accurate assessment of repair costs if you don’t do a thorough inspection? You cannot offer properties to knowledgeable investors without doing your homework. All it would take is one deal where they see something obvious that you should have but didn’t, and your reputation (which is all you have in this game) is shot.

Good luck,

wholesale properties - Posted by Tony in Dallas

Posted by Tony in Dallas on July 17, 2003 at 21:14:41:

when flipping wholesale junker deals to rehab investors, is there any reason for me to go inside and personally inspect the place? I am a newbie at this, I have been reading and studying but I am getting mixed signals on this part

Re: wholesale properties - Posted by jasonrei

Posted by jasonrei on July 18, 2003 at 17:15:31:

I am a rehab investor. I don’t think there is much agreement on what a “junker” is. I still don’t think I’ve rehabbed what I think of as a junker. Still, I would buy a property without seeing the inside if it was priced low enough. I mean, I know what homes in an area will go for. I’ll price my repairs high and assume the floor plan sucks, the slab is shattered, and everything is covered in mildew and cat urine. Oh, and there are soaked phonebooks strewn about up to my chest. Basically, that I need to expect the worst.

You know, the creative side of me has wondered how much I could get for a real junker if I dress up the exterior, board the windows up good, and sold it at an auction for cash. I wouldn’t do it, but I’ve thought about it when considering my options on a house.

Re: wholesale properties - Posted by IB (NJ)

Posted by IB (NJ) on July 17, 2003 at 22:59:23:

Working on my first double closing flip (I usually flip after I take title to properties) where the place is a real junker looking for an experienced rehabber. To give him practice, I had my Brother/partner negotiate the 1st and 2nd mortgages down to where we can make a nice profit ($12k) with no money invested (it’s a tax foreclosure). The last step was to get inside the place and inspect it (probably should have been done first but I had a good idea of what was required [almost a complete gut out] from peeping in from the outside). My Brother wanted no parts of it but I finally convinced him to do it. One look inside and he swore it was a waste of time as no one would want to buy this property and allow us to make the profit we wanted. After having him call several bandit signs we go under contract tomorrow for pretty close to our price. The guy took a look inside and said the deal was doable.

You never want to sell a house you haven’t inspected for yourself. And never let the work that’s needed get to you. There’s a rehabber out there for your junker if it’s priced right.

Re: wholesale properties - Posted by Kristine-CA

Posted by Kristine-CA on July 17, 2003 at 22:13:48:

Yep. My experience says: You gotta go inside eventually, unless you can inspect the entire interior from the exterior (and there are those properties that are like this). You can always make your offer subject to interior inspection.

In spite of efforts to make worse case scenario repair estimates, you can’t really tell until you see what’s in there. There is a difference if the interior is burned out, has a floor plan, is gutted, has any systems in place (wiring, plumbing, heat systems, etc.) has the dreaded black mold everywhere, etc.

Also, your buyers are most likely going to want to see the inside as well. They might appreciate knowing exactly what it is that you are selling.

You learn a lot about houses from going in them, and under them. Just my experience here.

Sincerely, Kristine