Deal Breakers

Hi Mark and everyone! I've been loving the podcast and have read Fix and Flip Your Way to Financial Freedom and Building a Real Estate Empire. I have one rental and want to flip. I have both bank abs private financing in place and have looked at about 10 properties. Went under contract with one but pulled out after sellers refused to hire a plumber to hook up and turn on all of the plumbing (on top of almost every system needing repair). My budget just got too big. So here's my question: What are real breakers for you? Looked at house the other day and they built an addition that was leaking terribly where it met the house. Other houses had leaking roofs that cause massive black mold. I keep finding houses in the $20k-40k range (distressed 2/1 900 ish sqft, $80-90k ARV) in my area but get scared by major issues. Mark, could you do a podcast on reasons to walk away from a house? I think your houses (less than 60 years old and in pretty descent shape) tend to have less issues than the cheaper ones I'm looking at. Maybe it's a price thing. Maybe you see the same issues (water damage, mold, plumbing or electrical issues, foundation cracks) and plow through them, but maybe some issues caisevyou to walk. Could you discuss a little? (Side note: Mark, I've loved your books and am nearly through all the podcasts and I appreciate your tips and advice. I'm starting my 3-5 year plan to leave my State government job to work on and flip houses and spend my days doing something I enjoy!)

Comments

  • Posts: 2
    Please excuse my grammatical errors. :)
  • It is all about the numbers! I will take on major repairs but there needs to be big rewards in order to do so. That is a good idea for a podcast. What to repair, not repair, how much work to take on etc.
    Creator of Invest Four More
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  • As Mark says, and he looks at the 70% threshold, it all comes down to the numbers. Never fall in love with a property or a deal. At the end of the day, you need to be able to sleep. I've had homes we bought for $40k end up costing us $100k in repairs and being upside down is no fun.
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