Mark Home Remodeling Contract Made Easy

Mark home remodeling contract

everyone it's Mark Ferguson with invest four more and welcome to other real estate video today we're doing another complete fix and flip before-and-after video so in these videos I show you the before video the after video go over all the numbers and give you other insights throughout the entire process after how it sells tell you what we really made on the properties including all the financing costs carrying cost selling costs all that good stuff so today we're doing a property I actually flipped almost two years ago a year and a half ago but it was one of the nastiest most disgusting properties we have ever bought and a lot of people who saw the other videos on YouTube would agree with that as well is also the last property I bought from the foreclosure sale the Public Trustee sale in Colorado which like I said was July 5th of 2017 so the reason it took us were one reason we bought it was because of July 5th I think most people thought the sale didn't happen but the sales been so competitive that we almost never buy properties there even though in the very beginning and we started this almost all of our properties were bought from that foreclosure sale so I'm gonna go over that process go over what we did to this property how we made it look a little better before it was disgusting which is trash and nastiness all over it and the guy who lived there just was there when we bought it so we had to negotiate a cash for keys talk to him about that and we actually bought this without me seeing the inside of it so that's always kind of risky Nikki my project manager had actually seen it with a wholesaler a couple months before so she saw a little bit but that made it a little scary too and of course when I got to the auction I bid more than I supposed to but I think it worked out in the end but that always happens so look over all kinds of tips and advice in this video along with what happened how much we made and show you how amazing this house looked when we first bought it all right of course check out invest for more calm for more information on my flips and rentals we have 15 flips going right now have over 70 flips on the site with before and after videos information how we bought them numbers all that good stuff so check that out alright let's get started alright what you're looking at now is a public trustee site for weld County in Colorado this is where the foreclosures are listed and how it works is you can search here for any properties that are in foreclosure and every Monday they have a pre sale list in this list I'll open it up here tells you what houses are going to sale this next week so right now this was earlier this week there was one house scheduled to go to sale in the past before during after the housing crisis we would see 30 to 40 houses a week going to sale now there's like 1 to 5 sometimes no properties that's one reason why don't by foreclosures anymore because there aren't any so was one reason why I'm not an REO agent anymore listing foreclosures for banks because there aren't any and while we've kind of moved into flipping houses which I enjoy more anyway but how it works you have Monday these properties are listed the sale is a Wednesday at 10 a.m. so you have a couple days to do your due diligence drive by the property talk to the title company and see if there's any liens because you are not guaranteed clear title you are not guaranteed this is a first lien it could be a second lien you really have to be careful you bid at 10 a.m. at the public trustees office it goes very fast it's kind of intimidating and if you're the high bidder you have two hours to bring cash to that office a cashier's check not a briefcase full of cash to buy the property if you don't have it in those two hours they go to the next bid or if nobody bids on it it goes back to the bank so that's how it works in Colorado kind of crazy every single state is different and that is how we bought this property we used to buy 90% of our foreclosures from the trustee sale you know 10-15 years ago now there's so much competition and so few properties that very rarely if ever buy property from the foreclosure sale this is the last one I bought which was almost two years ago now okay so here you can see the sale information for this house as the trustee sale the initial bid was sixty one thousand so the bank sends in their initial bid usually it is is owed by the borrower plus any late fees lawyer fees things like that so this guy probably owed closer to $50,000 when it went into foreclosure and then all the late fees back payments interest added up to the sixty one thousand crazy he didn't just sell it but he let it go into foreclosure because he didn't realize this but when you bid more than this bid he gets it back he gets the extra money back so sold on July 5th 2017 which was a day after the fourth of July I think that's one reason why I got this because a lot of people didn't know there's a sale that takes is right after the fourth of July there are only three people there normally there's way more people bidding so there's still someone that bid me up to 133 which was way more than I want to pay but I got into that competitive mindset of oh I want to beat the other person and bid more it really was not smart but we made money still but I should stick to my guns so what the previous owner realizes there's a 71 thousand dollar over bid over what he owed he got that money back so it's not the bank not the state that gets that he gets it back so that's one reason why he didn't really want to shoot us when we first talked to him as you'll see in the video because he was getting this huge check back he wasn't getting kicked out with nothing so that's how the sale works after we got the bid we had two hours to get the money to the public trustee I had a private lender who wrote me a check I brought it and actually 134,000 was the bid I don't know why it says 133 here they might have entered it wrong and then once we do that we get a certificate of purchase with away two weeks for junior lien holders to come say if they want to dream redeem it for me so if there's a second loan on this and HOA lien something else crazy they can come in and say hey I'm gonna pay off this first bid in the full hundred thirty three thousand to protect my interest so the state gives them two weeks to come do that after those two weeks are up then we get our actual deed we can start working on the property we officially own it alright so let's go look at the property right now the owner when I first came here kind of threatened to shoot me if I tried to kick but once I told them I was going on and he'd actually be making a lot of money because he would get the over bid from what we bid at the sale he changed his tone and was pretty happy actually asked us to give him a roll off so I could start cleaning up stuff that's why I just showed you and only took him a couple weeks to move out I didn't even offer to pay him or anything or no he's moving out he just called me one day he's like hey I'm almost out can I drop off the keys so he dropped off the keys we had him sign a personal you know property release that just says he vacated the property any stuff he left in here was ours and that way don't worry about him coming back saying we kicked him out or tried to steal any of his stuff this house needs a lot of work I said I just saw the inside a couple minutes ago lots of cleanup obviously carpet paint doors windows baths kitchen some drywall patches on me done however the floors are pretty level the walls are in somewhat decent shape at least some of the electrical and plumbing has been updated already it's got a central heating system so I've bought much worse I was a little surprised I know some you might not believe that but in a good way when I saw the inside because yes it's disgustingly dirty but it's nothing we can't handle and no huge crazy surprises here's the one bath which is nasty but it does have vaulted ceilings which is kind of interesting your homey vaulted ceilings are in the bathroom so well redo the tub pipe and tile new vanity new toilet a new floor all that see when you've got a trash can in your living room it's always a good sign but this is the first bedroom the biggest bedroom can see will need new windows so water bed he left for me one little hole in the drywall not too bad this is actually a really good size room and like the walls aren't in that bad of shape except for that one hole mostly it's just dirty and you know need some refreshing here is the kitchen little dining nook that was an addition I guess this little tiny part you can see where the old house used to be why you would add on like five feet to the back of the house and add a tiny little nook in the hallway I don't know but people tend to do that all the time so there you go and by the way this little when Nikki was here the first time she said that there was so much trash piled up there you could not get to the back door and it had been there for months if not longer from the way it smelled so it actually smells much better now I'm guessing when she first saw it where's the kitchen not horrible it really isn't that bad I mean we're gonna redo everything but I've seen much worse we'll do new cabinets new counters new floor it's not a bad layout it's a little house but this market is crazy I'm actually a Firestone Colorado it's probably worth at least 225 fixed-up if not more there's nothing for sale in this entire area right now like under 300 thousand it's just crazy so it'll be a good one even though it's a mess and I paid a lot more than it's going to pay for it originally it's still gonna be a great property and we'll get it fixed up and looking much better like I said before dump it down here it's got a furnace it's got central heat we've had a lot of older houses lately that did not we had to put them in from scratch so that's nice you can see you know drain pipes are old but a lot of the Plumbing's been updated some of the electrical has been updated not all of it foundation looks good it's actually a couple of semi usable rooms down here except they're about five and a half feet tall so to be pretty short to be able to stand up down here yeah and we'll walk around the outside one kind of weird thing is the access to the cellar is in a bedroom but there's carpet on that door so if you ever kind of annoying still but guess it will work for somebody hopefully oh yeah here's the outside we'll need a roof it's got T lock shingles so you almost always have to replace those roofs you can't ensure T lock anymore he left us a very beautiful safe which she kept his drywall in and you can see the roof those are T locks you can see some animals have been living under the roof so we'll have to do some work there beautiful shed in the back it's full of stuff this garage is full of stuff I can't open the door all the way I can kind of show you in there so yeah um more repairs I haven't put anything on paper but I'm guessing will spend at least 40,000 on this maybe a little more could be up to 50 needs a lot of work like I said it's gonna be worth at least 225 just about ready to go on the market it just needs a few things touch it up check out but for video on this house I'll have it in the comments or the description depending on if you're watching on Facebook or YouTube but this house was a mess but in the first video I did I did a live facebook video on this house before I'd ever got inside of it so that was kind of cool to watch but yeah I can check out invest for more Facebook page to see other cool stuff like that we have going on if you're watching on YouTube but this house I bought the foreclosure sale for 134 I never saw inside of it before I buy out to sale Nikki my project manager had seen it a few months before one is for sale with a wholesaler and we actually had under contract that wholesaler that deal fell apart ended up getting at the foreclosure sale so the guy who lived there here got a huge amount back from the foreclosure sale because when they go to the foreclosure the bank is paid back what they're owed and anything afterward that in any other liens the owner of the property gets back so we got like forty or fifty thousand dollars more than he owed on it after the foreclosure sale he was happy he left left us a whole lot of trash and stuff again you can see in the before video but now it's done just a few things we saw our painter masked over here he's got to come back and fix but we did a lot of drywall work completely redid this bathroom put in new windows new doors new flooring new light fixtures new paint of course I had to put on a new roof I believe this has a new furnace new hot water heater as well and yeah it's not a bad little house right now this is only what 800 square feet two-bedroom one-bath this is a real big nice bedroom here but the other ones kind of small we spent oh I would say like thirty thousand on this rehab here's the second bedroom which is weird because to get down to the basement you have to go through there but the door has carpet on top of it so if you're not going down there obviously you leave it shut don't you go down there for any reason but uh ya know where else to put stairs in his plows this is the kitchen as you can see we completely redid appliances are coming tomorrow so you got the microwave but the other appliances are not here yet they'll be stainless steel hopefully they'll come in soon and it's a little weird this is the breakfast nook area and we put a washer/dryer hookup right there because the only other hookup is in the basement through that bedroom so if people need to have their washer/dryer hookup upstairs they can put up here although it is weird that note guys hoping to put it back here but we couldn't make it work with the kitchen configuration but that's what we ended up with so we'll take a look stairs but this house I'm hoping we're gonna list for 224 nine so what make some money on it it will be one of the cheapest there's a new furnace houses for sale in this area I'm actually in Firestone Colorado so it's got three towns Firestone to Co no Fredrick for sale right next to each other actually that's still the old hot water heater we need the new one is not in yet but we are getting anyone and in those three towns this about five feet of clearance here so I'm gonna bend over in those three towns sorry the cheapest house actively for sale right now is three hundred and nine thousand so even though this is a little small house it's got some issues it will be by far the cheapest property for sale so it should sell and hopefully I'll sell quickly but we'll be listing it hopefully tomorrow now all right we'll take a look outside not the most ideal way to get into your basement but nothing else you can really do all right backyard little said back there which we painted actually put a roof on really I should just turn it down but sometimes you make bad choices on flips and spending money on that was one of those bad choices that's okay and then here's the garage which we just realized the number keys work to right now I think one of my contractors took the key to it but just has a dirt floor but still garage there's the back of the house the new roof new gutters new exterior paint all that okay so now we'll go over all the numbers what we actually made on this property so we bought it for one hundred thirty-four thousand I said 133 in the beginning because that's what the foreclosure site said I don't know why but in the videos we heard we actually paid 134 and looking back at my loan it was 134 so that's we actually bought it for sold it for two hundred twenty-nine thousand five hundred repairs twenty five thousand and we made 70 thousand five hundred ha right these are all what you might see on a house flipping show these are not the real numbers we spent way more than that have way more costs and we did not make anywhere close to that so we'll go through the real costs here first the financing costs I use private money at ten percent interest on this deal it's one hundred thirty-four thousand dollar loan so I paid for all the repairs everything else out of my pocket financed 100% of the purchase price I paid twenty six hundred sixty dollars in points so basically I paid two points on the purchase price and then interest 5542 over the life of the property we had it for five months so bought in July sold it in December so a relatively quick flip for how much work we had to do to it so we had eighty two hundred and financing costs repairs there was quite a bit three thousand for demo trash out the roof was expensive because it was in such bad shape paint we actually found a cheaper painter after this property but that was kind of expensive for inside and outside paint flooring kitchens all the stuff we get from Home Depot very affordable with our managed pro account save a ton of money over the prices you see as a regular customer there the bath light fixtures plumbing fixtures plumbing work had to do some electrical work install doors and saw windows new furnace and then miscellaneous stuff like cleaning up the yard doing some of the shed work some drywall patches we spent forty two thousand two hundred and listening to the after video I think I mentioned thirty thousand and I don't know if I was really tired or was that number but the first video I mentioned forty to fifty thousand which was in line I don't know why I said only thirty in the second video so just ignore that as totally wrong so that's about what we spent on repairs carrying costs insurance seven hundred that's you know prorated once we sell we get a refund for how much insurance is taxes in Colorado are so cheap eight hundred fifty one dollars a year for taxes there so our share was 345 for while we owned it have utilities gas electric water we all have to pay while we own the property mowing it you know we can't just let the grass grow three feet tall while we have it we have to have it mowed every couple weeks so there's our carrying costs and selling costs so we're paying commissions to the buyer's agent when we sell the property closing costs for title insurance recording fees things like that and then on this deal we actually listed it for 204 thousand five hundred but the buyer asks for five thousand in closing costs to help pay for their loan costs origination fees and that's why the purchase price was 229 five five thousand more than our asking so that comes out of our bottom line so thirteen thousand some and selling costs and you add up all those costs here and we ended up having sixty five thousand nine hundred and seventeen in costs not twenty five thousand in just repairs so you see about it from 134 sold for 229 five after the real costs we made twenty nine thousand five hundred and thirty eight dollars so good deal made money not crazy profitable but it worked out and even though we paid more than I really wanted to at the foreclosure sale it turned out to be okay all right so that's our video that's how this one turned out we'll have more of these coming up soon so be sure to subscribe if you want to see those we also have before videos and whenever we buy a new flip after videos whenever we finish them advice videos videos on my rental properties we've got 20 rentals right now and always trying to buy more of those so be sure to subscribe be sure to give us that thumbs up if you liked him if you have any comments or questions leave them below as well thanks a lot and have a great day see I got a haircut