Fixer Upper Q&A: You Ask. We Answer.

 

Fixxer Upper, Fix and Flip, How to flip a House

Brandon and I are starting a new series on here in which we answer all of your burning questions about fixer uppers and our weird daily life. We get a lot of questions regularly about what, how and why we do what we do so we thought a little Q&A series would be fun and hopefully helpful to those of you interested. Today, we’re answering 5 common questions we get asked about finding properties and getting started.

1. How do you find properties?

No it ain’t luck folks. Well actually maybe it is if you’re thinking in terms of that quote “luck is where preparation meets opportunity.” Brandon is the master property finder and focuses a great deal of time and energy on marketing efforts to find properties. The main marketing technique he uses is direct mail, and google organic search would be a very distant #2. Brandon puts together a series of direct mail campaigns throughout the year and sends them to targeted addresses that he obtains both through purchasing lists and writing down properties while driving through neighborhoods that meet certain criteria. If you have any specific questions about designing/executing direct mail campaigns, etc. feel free to shoot us an email and we’ll be happy to answer directly!

2. What makes a property a good investment?

If a homeowner expresses interest in selling their property, then there are a few things we need to consider first. The two most important are:

  • Forced Appreciation: We need to be able force appreciation some way, some how, into the house which means fixing up anything that’s dated/disgusting and/or expanding square footage to make it conform to the neighborhood. This doesn’t necessarily need to be a shitty, run down house – just simply that the house isn’t being utilized to it’s highest, and best use if it’s not worked on.
  • Strong Neighborhood: The location of the property obviously plays a big part. Strong neighborhoods are strong in all markets. We are also able to get a pretty good idea on the strength of a neighborhood, and relevant pricing, based on homes that have recently sold in the area, schools, parks and shopping in the area.

3. Do you do any of the fix up yourselves?

Seeing as how our most “handy” project to date has been to slap together some wood slabs and call it a coffee table (ok, we’re actually really proud of it), no, we do not do any of the actual fix up ourselves. We hire license, bonded, insured contractors for every facet of the job.

4. Who is on your team and what are their roles?

  • Realtor: His job is to market and list all of our properties. He also helps with analysis and deal finding in some cases.
  • Title/Escrow Rep: They are a neutral third party who handles all the necessary paperwork and money needed for a real estate transaction.
  • Lenders: Yes that’s right folks, we do not have $1 million in cash. So, we utilize private lenders whose entire business is lending on investment properties.
  • Contractors: Brandon plays the role of owner/builder aka general contractor. These are all of the different types of contractors that are subbed out
    • Electrician
    • Plumber
    • Painter
    • Tile Guy
    • Carpenter
    • Roofer
    • Landscaper
    • Engineers/Architects
    • Demo Team
  • Lawyer: Reviews contracts, sets up lending documents
  • CPA: Tax prep and planning
  • Stager: For our first few projects I was doing the staging myself and then found it made the most sense to take this off of my plate for our last project and outsource it to someone that does staging full time.
  • Brett (Designer/Project Manager): I design every visual element of the home, source all relevant materials and then make sure everything is ordered according to timeline and installed properly. In cases, like El Ray, where we are tearing down walls and building out a second story I work with a structural engineer/architect to develop the new floor plan and make sure everything flows how we want it to.
  • Brandon (Owner/Investor/General Contractor…and the list goes on):  Call me biased but he is a man of a million talents. Brandon focuses on finding deals, negotiating, hiring/firing/managing contractors, managing the team, bookkeeping, and ordering materials.

5. What’s the timeline look like for each project?

Each project is a unique and special snowflake. There are essentially 3 levels of rehabs that affect how long a project takes. They are: cosmetic, major mechanical, and adding square footage/new build.

  • Cosmetic (less than a month): this involves fresh paint, flooring/carpet, and light landscaping
  • Major Mechanical (no less than 3 months): if you’ve ever heard the term “gut job” this is that. Plumbing and electrical are usually not up to code, the foundation could be damaged, and/or there’s significant dry rot/pest damage.
  • Square Footage/New Build (no less than 6 months): any time you are adding square footage usually involves going through a design review with the city and alerting your neighbors of your plans (which they can veto!) and potentially a new foundation which can take some time.

 

What other questions do you have for us? Submit them by using the form below so we can address in future posts!

Brett Foken