Part Time REI » property repair estimate sheet

Time vs Money

Erik Hitzelberger — Fri, 03 Oct 2014 17:43:27 +0000

We have all heard the cliche “time is money”and no truer statement was ever made when investing in real estate. Times that by 2 if you are investing on a part-time basis. So how can you make sure that you are not erroneously spending your time and money when flipping houses?

Let us tell you how…

One of the most important documents you need is s Property Repair Estimate Sheet. A properly done one will include a list of all of the major items (roof, hvac, kitchen, paint, flooring…) as well as cost estimates for each item. You should complete one of these during your initial visit of every house you look at. We usually call this your initial walk through. This form is going to give you 2 important benefits; save you time and give you confidence.

Saving Time

Saving Time

Many rehabbers waste time looking into every dark corner of the house during their initial walk-through. They may spend hours measuring and documenting every detail to come up with the best estimate possible. This can be a tremendous waste of time especially since there is a good Click here to see our list of houses not to buy.

With a good Property Repair Estimate Sheet you should be able to complete your initial inspection in 15-30 minutes. The goal is to get a rough estimate (within $5,000) so that you can make an offer. Simply checking whether the repair is needed and including the corresponding amounts will allow you to total the necessary costs in a few short minutes. Anything beyond that is a waste of time. If you have a tried and true system in place, steps that you follow for every rehab, then you will not spend unnecessary time on issues and will have a turn-key process. It will mean every rehab is done consistently.

Providing Confidence

Having a list of what actually needs to be done to the property will give you confidence that you aren’t overlooking anything. By referring to your list, you will make sure that no major items are missed. It is easy to be distracted by something odd in a house and forget to check out every other area. By referring to your Property Repair Estimate Sheet, you can be confident that you have reasonably captured all items. The cost of overlooking a missing air-conditioner, damaged roof or cracked foundation is way too high to rely on your memory.

Also with a system in place it will help to build your confidence that you haven’t overlooked any repairs. You will know how much a kitchen over haul costs so when a contractor over bids you have the confidence to speak up about it. Remember, knowledge is power.

The essential thing to remember is that systems work. Having good systems in place will make sure everything is done in the most financially sound and cost-efficient way. In the end, systems are what will save part-time real estate investors time and money by preventing costly mistakes.

To learn more about Part-Time REI visit us at http ://part-timerei.com/

Or connect with us

Flipping House Series: The High Risk House Part 1

Erik Hitzelberger — Mon, 25 Aug 2014 18:23:46 +0000

As in any of life’s adventures, sometimes you just gotta take a risk. This is true, more times than our team would like, painfully true, in real estate investing. Our next home on our list is a house our team just bought. This particular home was purchased at commissioners foreclosure auction. What that means is we were not allowed inside to see the house before we bought it so needless to say there was not an initial walk through so we could not do our Property Repair Estimate Sheet beforehand. Keep in mind you have to buy these properties with extra safety margin (i.e. lower purchase price) due to the uncertainties of not being able to see inside. If you are lucky higher risk means higher profit. However as you can see from the pictures below we were in for an unpleasant surprise. Here’s the before pictures of The High Risk House

Front of House Before

Dining Room Before

Kitchen Before

Laundry Room

Under the Sink

Bathroom Before

Ceiling

Junk

To learn more about Part-Time REI visit us at http ://part-timerei.com/

Or connect with us

Killer Confidence

Erik Hitzelberger — Fri, 15 Aug 2014 16:15:56 +0000

So you are probably wondering how to get there. How to gain that confidence to get into that investor mindset. A strong, successful investor in real estate realizes that a paradigm shift happens in your mind. A person goes from ‘How do I earn money? to ‘How can I save money’? While there are always limits to how much you can save, but there is not a limit to how much you can earn. It is the biggest shift in thinking you will have to make.

First and foremost educate yourself. Education plus action is the key. Part-Time REI has a Flipping University to help you get started. Our team is also big promoters of mentoring. We believe it is the secret to success. Get connected with the right people. Mentoring is how people who are great at what they do learned, and it’s how our team learned. It has been said that experience is the best teacher. But what we suggest is why spend valuable time reinventing the wheel? Part of our Flipping Houses University series talks about learning from others mistakes and the value of time. Instead, if you learn from those who have been successful before you, you become more successful much faster.

Secondly, have a tried and true system in place with steps that you follow for every rehab, then you will not spend unnecessary time on issues and will have a turn-key process. It will mean every rehab is done consistently. Also with a system in place it will help to build your confidence that you haven’t overlooked any repairs. Once you have a system that includes a Property Repair Estimate Sheet you will know how much the repairs should cost. Having a list of what actually needs to be done to the property will give you confidence that you aren’t overlooking anything. By referring to your list, you will make sure that no major items are missed. It is easy to be distracted by something odd in a house and forget to check out every other area. By referring to your Property Repair Estimate Sheet, you can be confident that you have reasonably captured all items. The cost of overlooking a missing air-conditioner, damaged roof or cracked foundation is way too high to rely on your memory.

To learn more about Part-Time REI visit us at http ://part-timerei.com/

Or connect with us

The Do’s and Don’ts of Investing: Part 2

Erik Hitzelberger — Fri, 01 Aug 2014 15:57:39 +0000

Thanks for checking back with us for Part 2 of The Do’s and Don’ts of Investing. In Part 1 we talked about not forgetting to do your homework and your research. We also pointed out the importance of not investing in something you don’t understand and to make sure you surround yourself with like minded people. Next in Part 2 we go over a few more do’s and don’t when investing in real estate.

1. Do Learn the Art of Leverage

Please don’t be this guy; the one that thinks he can do all the trim work, the landscaping, the listings, the cleaning…get our point? Don’t overextend yourself. Be sure to keep your ambitions in check and don’t bite off more than you can chew. One of our main lessons in the Flipping Houses University is how to build your investing team and choose the right dependable people to help you accomplish your investing goals. Remember this word. LEVERAGE.

2. Don’t Be Too Big for Your Britches

Remember your mom telling you that? Don’t try to act like you know everything when in fact you are just starting out your flipping career. In reality, whether you are just starting out or have been investing for years… be yourself and be real. You will gain many more meaningful relationships that way–ones that you can use to your benefit. See LEVERAGE. Admit to what you know and what you don’t know. Don’t dismiss the advice of those who have been investing for years. They’ve seen both the ups and the downs in the market, and really know what they are talking about!

3. Do Use a Property Repair Estimate Sheet

One of the more important documents you need is Property Repair Estimate Sheet. This document should include a list of all of the major items (roof, hvac, kitchen, paint, flooring…) as well as cost estimates for each item. You should complete one of these during your initial visit of every house you look at. The 2 main benefits of the form are 1) to save you time and 2) to give you confidence to proceed with the deal.

4. Do Know “Why”
Always know your why. Keep the main thing the main thing. Don’t get side tracked in all the hype. Keep in mind the reason you chose investing in real estate as your alternate income revenue. Maybe you want to be able to retire early. Or you are trying to pay off your house, or save for your kids’ futures. We provide these blogs so that what is important to you stays important. For example like spending time with your family. Don’t ignore your family while trying to build your business because then you would be sacrificing the very goal you are trying to reach.

To learn more about Part-Time REI visit us at http ://part-timerei.com/

Or connect with us

What You Must Disclose: Part 2

Erik Hitzelberger — Fri, 04 Jul 2014 16:00:07 +0000

Last week we took at look at some of the rules of disclosure. What you think you must and really don’t have to on a home might surprise you. In our last blog we talked about Deaths in the Residence, Neighborhood Nuisances, and Environmental and Natural Hazards. Today we sum up our disclosure recommendations with Association Information, Lists of Repairs and Items, and the one everyone loves, Water Damage.

Association Information

If the home or neighborhood is governed by a home owners’ association (HOA) you should disclose that fact. You also need to know about the HOA’s financial health and provide this information to the buyer so that he or she can make an informed purchasing decision. Or if the home is part of a historic association, buyers will need to know if the home is in a special historic district because it will affect their ability to make repairs and alterations, and it might also increase the cost of those activities.

Repairs and Lists of Items

Buyers need to know the home’s repair history so they can have their home inspector pay extra attention to problem areas and be aware of probable future issues. Texas law, for example, requires sellers to disclose previous structural or roof repairs; landfill, settling, soil movement or fault lines; and defects or malfunctions in walls, the roof, fences, the foundation, floors, sidewalks and any other current or previous problems affecting the home’s structural integrity. You may also need to disclose electrical or plumbing repairs and any other problems you would want to know about if you were going to buy the home and live in it.

Some states, like Texas and Michigan, will require sellers to disclose whether the property comes with a long list of items, including kitchen appliances, central air conditioning and heating, rain gutters, exhaust fans and water heaters.

Water Damage

When water gets in where it shouldn’t, it can damage personal possessions, undermine the home’s structure and even create a health hazard if it encourages mold growth. Mold is not always a bad thing though; it is usually an easy fix and will turn off other potential investors. Sellers should disclose past or present leaks or water damage. Michigan, for example, requires sellers to disclose evidence of water in a basement or crawl space, roof leaks, major damage from floods, the type of plumbing system (e.g., galvanized, copper, other) and any known plumbing problems. It can be difficult to know about water problems (and many other types of problems) if you’re flipping the home and only own it for a month or two.

Just always keep in mind that there are many risks for flippers or investors when closing on a rehabbed property. Some things might not have been obvious on your initial walk-through when you were filling out your Property Repair Estimate Sheet, particularly if it was in winter or during a dry spell. With both situations can be concealed. In situations such as these, check to see how much protection your state’s laws offer from disclosing information you would have had no way of knowing.

To learn more about Part-Time REI visit us at http ://part-timerei.com/

Or connect with us

Flipping House Series: The Dirt House Part 1

Erik Hitzelberger — Mon, 14 Apr 2014 16:00:34 +0000

The “Dirt” House

Every once in a while our team finds a home that will need a little extra work. Sometimes these extra work flips can turn out being big on their return. Our next home in our Flipping House Series did just that. This house was nick named The Dirt House because the flooring was gone and essentially we were left with “dirt floors” and also the front and back yard did not have any grass….just dirt. Let’s take a first look at the repairs needed on this investment property.

The Dirt House was purchased for $45,000 and is one of our smaller and lower price point flips. As mentioned before, the floors were in quite the disarray and after our initial walk through, we noted on our Property Repair Estimate Sheet that we would need subfloors in at least the kitchen and bath.

Another huge issue was the back yard. It didn’t have any grass, just dirt and it had not been maintained at all. The front lawn would need soding as well as some nice landscaping. Here’s a full list of

repairs needed in The Dirt House.

Repairs

Kitchen – Subfloor, Flooring, Walls, Windows, Cabinets, Counters, Appliances

Bath – Subfloor, Flooring, Tub, Tile Surround, Vanity, Toilet, etc

Back yard sod and front yard Landscaping

General – Paint, Carpet (BRS), Hardwood (LR), Windows, Doors, Deck, Siding Repair, Lighting, Plumbing (all), Electric (most), HVAC (ductwork), Floor Joist repair.

Please check back in a few weeks to see how The Dirt House turns out. It is amazing what a new kitchen and some sod can do for a flip and for your return!

To learn more about Part-Time REI visit us at http ://part-timerei.com/

Or connect with us

Flipping House Series: The Mold House Part 2

Erik Hitzelberger — Mon, 20 Jan 2014 18:13:05 +0000

After the auction of The Mold House we thought back and could have swore we heard the auctioneer say “Going once, twice, SOLD…mold included.” As you may remember why we aptly named this house we are of course dealing with the mold. Let’s check in to see how The Mold House is coming along.

This house could have also been named “The sump pump house” as well since the sump pump was turned off. It was not running because power was turned off by the bank. As mentioned before this can be common and is something investors should definitely be aware of with foreclosures. We are repairing the sump pump and removing the water.

Other repairs

Remove drywall and flooring in basement and re-drywall
Sand and refinish hardwood floors
New windows
Reglaze bathtub
New bath vanity and fixtures

We are also painting and adding new carpet

New kitchen countertops and appliances are on their way too.

Be sure to check back in a few weeks to see how The Mold House turns out.

To learn more about Part-Time REI visit us at http ://part-timerei.com/

Or connect with us

Flipping House Series: The Junk House Part 1

Erik Hitzelberger — Mon, 16 Dec 2013 17:34:06 +0000

The next house in our Flipping House Series is The Junk House. This was a foreclosure and to say the least when the people left, they left behind more than just their house. The kitchen was very dated and the carpet had to be replaced. While doing our initial walk through and filling our our Property Repair Estimate Sheet, we were able to assess that the carpet had hard wood floor underneath. BONUS! Hopefully we can refinish is to add a wow factor to this flip.

Let’s look at some of the main areas of focus of The Junk House.

Kitchen

As you can see the kitchen is very dated with a color appliances we haven’t seen since maybe Reagan was in office. The cabinets are nice though and we may be able to refurbish them.

Bathrooms

The bathrooms are also very dated and will need some work. We will definitely get get of the pink paint and the patterned wall paper.

Ceiling Leaks

We noticed a few leaks in the ceiling during our initial run through. We will have to get to the bottom or “top” of this problem as a ceiling leak can mean a problem with the roof. We will know more once we get the roof inspected.

Basement

Junk, junk and more junk. So this is where this house got its name; from all the junk left inside. As you can see we have quite the feat ahead of us going through the basement and clearing it out. Only then will we have a clear view to assess any problems with the walls and/or foundation.

Here are some other before shots of The Junk House. Stay tuned to see how it gets flipped!

Bonus Room

Wood Paneling

To learn more about Part-Time REI visit us at http://part-timerei.com/

Or connect with us

What’s a Whole Home Inspection Involve?

Erik Hitzelberger — Fri, 13 Dec 2013 17:07:56 +0000

This is the big one. A whole home inspection is the mother load of all inspections. Here is a look at the major points and what’s included in each one for most parts of the country.

The Structure

Entry ways, foundations, siding and porches looking for such symptoms of trouble as sagging roof lines, gaps in or damage to the siding, porches pulling away from the building, obvious signs of rot or insect damage, settlement, certain types of cracks in foundations, cill or rim (the wooden support that sits on the foundation and into which the framing is fastened) and framing where it is exposed.

The Exterior

Visual assessment of decks, balconies, eaves, soffits and fascias. Obvious drainage problems, walkways and driveways for apparent deterioration or safety concerns. Vegetation surrounding the house for obvious problems such as root intrusion. Electric garage door for functionality.

Note this doe not include outbuildings or fences.

Roofing Inspection

Age of roof determined by hands on inspection (inspector climbs on roof) of by binoculars. Roof drainage systems, flashings, skylights, chimneys, and roof penetrations (for vents and flues).

Plumbing Inspection

Testing the interior water supply and distribution system including water pressure, water heating equipment (estimating age and approximate time to replacement) and the appropriateness of vents, flues, and chimneys. Toilets for leaks and faucets for leaks and water pressure and the immediacy and volume of available hot water.

Electrical System Inspection

Over current protections, grounding, and the presence of any aluminum wiring (a serious fire hazard and banned for many years in most states). Switches and outlets in the house and note the adequacy of smoke detectors if the state does not require a separate inspection by the local fire department.

Heating and Air Conditioning Systems

No matter the time of year the furnace should be tested by turning up the thermostat and checking the response. Air conditioning cannot be checked if the ambient outdoor temperature is below a certain point. If the energy source is oil an inspector will check the condition of the tank and any visible lines running from the tank to the furnace. Some inspectors will run an efficiency check on the furnace for an additional charge.

Home Interior:

Floors, walls and ceilings for signs of water intrusion, or sagging. Stairways and railings for safety and code compliance and a sample of windows and doors inspected for condition and ease of operation. The basement for indications of previous water intrusion in addition to signs of structural problems.

Ventilation

Poor ventilation can lead to rot, mold, poor air quality or excessive energy consumption. An inspector should check insulation and vapor barriers in unfinished areas of the attic and in the foundation area and look for the presence and operation of any mechanical ventilation systems in the attic and other high humidity areas such as kitchens and bath.

Appliances

Any appliances included in the purchase will be checked for functionality.

Fireplaces

If applicable-integrity of the flue, proper draft, any blockages in the chimney in addition to the exterior of the chimney for damage to bricks, pointing, and flashing.

Knowing these points will help you be more prepared for your whole home inspection and be able to assess from your Property Repair Estimate Sheet what repairs are needed.

To learn more about Part-Time REI visit us at http://part-timerei.com/

Or connect with us

Hot Colors to Warm Your House This Winter

Erik Hitzelberger — Fri, 29 Nov 2013 17:23:08 +0000

Which color?

In October, Pottery Barn announced its Fall/ Winter color picks. This seasonal palette is the result of a partnership with Sherwin-Williams for determining the best winter looks. As we all know, there are so many paint color choices that it can be a daunting task to find just the “perfect” color. This can be especially true when you are trying to sell a remodeled home. Here’s a quick “go to” list to help. What’s nice about this palette is that it’s reduced to a manageable number of choices as to not be too overwhelming.

We all know that color can sell your home and a fresh coat of paint should always make your Property Repair Estimate Sheet. But when you are filling out your Scope of Work be sure to be conscious of what paint colors will go with the over all look of the house. While you want to be generally neutral, keep in mind the most likely end-buyer as you are making your selections. A young urban neighborhood may require different selections than a mid-range family home.

For staging tips be sure to check out our guest blog from staging guru Christine Rae.

Or check out our tips and tricks blog!

To learn more about Part-Time REI visit us at http://part-timerei.com/

Or connect with us