<p>As a fairly clueless homeowner with potentially big projects in the future, having someone like coralbrook working with us would be a dream come true. It would be far easier and less stressful (theoretically), and maybe even more profitable to work with helpless homeowners.</p>
<p>sale price 469000
- credit 5000
- commission (4.5%) 21000
- cost 392000</p>
<p>= 51000</p>
<p>I don’t know what seller closing costs might be in CA, in MA there really aren’t any in most places, except maybe for final utility and tax payoffs, but these would typically be very small.</p>
<p>I know busdriver11. I just finished doing what you are suggesting. :)</p>
<p>How stressful, dstark. Unless, of course, you knew what you’re doing. Or at least had guidance. I’ve heard that building a house or a serious construction project has caused many a divorce. People would pay a lot of money for expertise in order to avoid such difficulties!</p>
<p>My parents project was small. I saved money. I didnt have to deal with anything. Very little stress.</p>
<p>I hired somebody like coralbrook.</p>
<p>city and county transfer tax, if applicable. county tax is 1.1/1000 city tax may or may not apply. In my town its 4.5/1000, it could be substantial. There is escrow charges as well, about 1500 for a 500k transaction. not sure if seller agreed to pay title insurance or not.</p>
<p>list price is 462k i think.</p>
<p>city transfer tax is 15$/1000 in Berkeley… now you know why it is a top school in CA:)</p>
<p>So if you sell a million dollar house, you pay $15K to the city just for the honor of selling your house. Or maybe it’s for all that challenging paperwork they have to do. I think the transfer tax is even worse here, over 2 percent. Shameless.</p>
<p>better yet, city transfer tax in City of SF is graduated from 5/1000 for transactions under 250k to 25$/1000 for transactions over 10Million. And for 250K, in SF, you may buy a kiosk in middle of the sewer main line…</p>
<p>Wow, expensive. Everybody has to make a buck when you sell your house, I guess.</p>
<p>They figure you’re just rolling in money at that point.</p>
<p>After paying the mortgage for that kind of house, and the realtors fees, you just might be broke. Unless you had the house forever and got a serious gain. Shoot, a million or two might not even buy much of a house around there.</p>
<p>
You are right, I don’t know why I thought it was listed at $469K.</p>
<p>To be exact on the total time invested in this project:
2 1/2 months trying to find a deal.
5 1/2 months to sale
Total 8 months</p>
<p>I do not have large closing costs because I did a binder on the title insurance that the previous Seller paid for. A binder on title insurance means that I can transfer title insurance to my buyer at minimal cost, maybe about $150. I get a good deal on escrow costs because I am loyal to my escrow company and have established a good relationship. They can lower their standard cost because they have all my info on file, there is no loan payoffs required in the transaction and i do all driving of docs. I will not allow charges for ridiculous messenger fees. </p>
<p>We don’t have a City transfer tax, just the standard County transfer tax of $.55 cents per thousand. Also, I have negotiated 4.5% commission, standard in our area is 5%. And, I won’t pay commission on seller credits. This causes a big problem for my agent’s brokerage because its a very unusual condition and difficult to communicate to the buying agent. Evidently they are not allowed to warn buying agents in the MLS. So my agent has to eat the cost and refund me directly. But, its a big sticking point for me. Why should I pay commission on money I never received? So, on the current escrow, I will only pay commission on the $457,000 net proceeds.</p>
<p>Yes, this has taken longer than anything I have ever done for a minimal profit. Luckily I had two previous projects in 2013 that paid well. One was a “home run”. Although this income will fall in 2014. Maybe 2013 will actually qualify me for some financial aid for college tuition:)</p>
<p>Its a business of averages. I had to take this huge risk project because there was nothing out there. I have been watching auctions and MLS since this purchase and there were very few properties that I could afford. </p>
<p>The feeling on the day we take the photos for listing, Priceless! I get huge emotional and creative satisfaction.</p>
<p>“The feeling on the day we take the photos for listing, Priceless! I get huge emotional and creative satisfaction”</p>
<p>That is worth a lot …</p>
<p>Regarding doing renovations for other homeowners. This has two issues which are hard to overcome:</p>
<p>Liability- if I work for someone else then I am acting as a general contractor. I don’t have a contractor’s license. Although I have two employees legally paid through payroll with workman’s comp there are many low cost day laborers working every now and then and a lot of subcontractors. You never really know. The homeowner would have to assume some liability, especially if permits were involved. I would be a “paid” consultant.</p>
<p>Emotions- I’m not sure if I could do this for a homeowner doing their own house. There are hundreds of daily decisions to keep a project on schedule. Especially design and material decisions. So let’s say there was a budget and schedule. To get plumbing done correctly we have to know exactly what bathroom vanity is being installed. Have you ever seen a homeowner go straight to Lowe’s and pick out a vanity in 30 minutes? Things would drag out forever. And both parties would end up frustrated.</p>
<p>The best situation would be working together on a property that needs to be sold. However, the homeowner would have to trust me on what needs to be done for target market. A lot of investors just want to go super cheap and it ruins the product. You should see some of the ugly stuff my competitors do. And there are important touches, home needs to be extra clean all the time, professionally cleaned windows, etc</p>
<p>So, I’ve never figured out how I would be paid or how it could work. I am open to working on a project where home gets appraised at X and then partner with homeowner to fix it for sale. We would do some kind if split of profit when it sells for Y.</p>
<p>I think if I were as capable as CB, I could not work for a Homeowner in a project like this.</p>
<p>First of all, real estate and re construction are local, you cannot hire some one from San Diego to New York to start a project like CB did. In NY CB will be lost, she does not know any one there and she does not know the building requirements (not to the very details).
Secondly, contractor’s license, even you have it, is only good in the State issued.
Thirdly, There might not enough meat on the bone to have some one like CB to micro manage a project. In a renovate and sale process. Even there is, the home owner must trust some one who they met on the net for a project lets say 100K in total value, without comparing prices.</p>
<p>So unless some one lives next door or in the same town as CB who just go ahead hire her as a project manager with total trust, it is unlikely the proposal will happen.</p>
<p>I agree, one of my key advantages is developing a very loyal and trustworthy team with great skills. I have gone through the worst subcontractors until I found the very very best electricians, tile installers, etc. They are local and the network doesn’t transfer outside of my County.</p>
<p>Although my employees and I are trying to find a way we could do a flip in Hawaii! Hawaii is just something totally exotic that they’ve only seen on TV.</p>
<p>I have seen a new concept from a real estate company called Renovation Realty. I’m not sure if they are nation wide. They are a realty company that will sign an agreement with a homeowner to do renovations (I think they put in their capital) and then have the listing when it is complete. Probably a very lopsided split on the profits.</p>
<p>I have not seen them have much success in my area, their properties are lingering on the market with cheap renovations and high asking prices. But, it is an interesting concept.</p>
<p>We are moving along in escrow, the buyer’s deposit arrived by mail into escrow today. That’s always the first hurdle. I had one buyer poop out of the contract before ever even putting the deposit into escrow.</p>
<p>It turns out our buyer actually lives about 5-6 hours away from the San Diego area. I only know that she is moving here to be near her mother. So, some things will be challenging during the escrow. She has scheduled the Home Inspection for next Saturday which means we have to, have to, have to, get this garage done before then. Since our roof trusses are not showing up until Monday morning this means that I need to have every single duck in a row to get the roof raised, roof sheathing, shingles, overhang tongue/groove, painting, garage door… you name it!</p>
<p>We will probably not have our 1 1/2" reinforced concrete slab poured onto garage floor by then, they are just going to have to live with it.</p>
<p>More pictures loaded of the garage. My lead did something ingenious in order to work on the garage door wall. He took off the original sliding carriage doors that were derelict and moved them 6 feet into the garage interior, nailed to studs. This provides security for our items stored in the garage and opened up the entire area so that he can rebuild the new garage door wall and opening (with huge new header).</p>