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Contributor
squinchy
Posts: 46
Registered: ‎12-17-2009
0

Custom flip

We're looking for a contractor or contractor / investor team to acquire a property in need of rehab on our behalf, remodel with our input and then sell to us.  This is in the Lamorinda area.  Let me know who you know.

 

Thanks,

 

-j

Regular Visitor
DiabloGuy
Posts: 8
Registered: ‎02-12-2013

Re: Custom flip

So you want someone else to purchase the property, take the risk of finding who knows what when they pull the thing apart, listen to your ideas re: the remodel, even if they don't coincide with what most buyers want, and then take a chance the you qualify to buy it when done for less than the market price?

 

Why would anyone do this?

 

It sounds like you have enough money to buy, but not enough to fix up a place.

 

I suggest saving more or moving in and do the renovation work when you can.

Contributor
squinchy
Posts: 46
Registered: ‎12-17-2009
0

Re: Custom flip

Re: finding who knows what when they pull it apart -- Don't flippers assume that risk on every flip?  We don't have a specific property in mind, and we'd want the contractor / investor to have veto power on candidate properties if they thought it was too risky based on their inspection.  Most likely we'd be looking at places that they would consider buying as a flip even without our involvement.

 

Re: risk of us backing out -- We'd commit up front to buy the finished project, with earnest money in escrow that the contractor / investor can claim if we back out.

 

Re: marketability risk due to our design choices -- Perhaps.  Maybe the contractor has veto power here too if they're really concerned about this.  I'll posit that they have the opportunity to make more money on this project than a standard flip, because we'd likely choose higher-end stuff.

 

I'm not suggesting that we'd pay less than market value for the finished project.  Seems like an attractive deal to me -- less risk for the flipper because they have a committed buyer up front (with recourse available if we back out), and they avoid any sales / commission / marketing cost for the finished project.

 

We're well-qualified buyers, but we can't compete with all-cash offers from other flippers on $500K+ fixer properties.  

 

 

Platinum Trusted Contributor
elt1
Posts: 5,185
Registered: ‎01-04-2010
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Re: Custom flip

[ Edited ]

Flippers have plenty of sources of money, and since your are not a cash buyer, you can't even offer that...why would they work with you?  Flippers make money based on speed...the velocity of transactions controls their IRR.

You will just slow them down. Sorry but they don't need you.....the takeoffer by the cash buyers is the unintended consequence of the newer tough lending standards...The new rules are hurting ordinary home buyers and are a gift to professional flippers that can raise money directly through investors...Now that the REITS are getting into the business the typical 10-20% down buyer is screwed...

Platinum Super Contributor
buyinghouse
Posts: 5,890
Registered: ‎04-23-2011
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Re: Custom flip

   Good idea but not workable. Knowing the human factor on every thing in life tells me that whoever dares to do what you want is going to get into a nightmare. Not that you are a bad person, but who knows if the paint job satisfies you, that the fireplace should get granite instead of bricks, that thinking about it you don't want that roofing but the other one and so on.

   Unless you have a video of the home you want, with the sq. footage and the amenities you want and a builder or contractor willing to perform, I don't think you can achieve what you're looking for.

 

   Again, let's say I buy the property, torn down the place and build the home for you; who can assure me that you won't lose your job, you will go to Las Vegas and wage everything on one single bet and lose up to your underwear?

 

  What you're asking is similar to an FHA program where you buy and fix the place to your like with money the program gives you but I don't think it goes that far to start from the ground up.

 

  Now, if you had the land, and put the money in escrow to build the home of your dreams and a contractor willing to suffer any rants, it can be done, but who is willing nowadays?

 

21 to go:smileywink:

Regular Contributor
delectron
Posts: 69
Registered: ‎02-01-2011
0

Re: Custom flip

 

Why don't you just wait for a flipped home to come on the market? Granted it doesn't happen often.

Silver Super Contributor
ptiemann
Posts: 1,256
Registered: ‎08-07-2009
0

Re: Custom flip

[ Edited ]

the issue is, that you said you will deposit money into escrow and the investor guy can keep it if you back out. CA allows only 3% to be kept by the seller at the most.

Contributor
squinchy
Posts: 46
Registered: ‎12-17-2009
0

Re: Custom flip

This is the type of company I'm looking for.  Too bad they're in CO and not here.

 

http://baileycustomhome.com/about_us

 

Silver Contributor
MyCousinVinny
Posts: 506
Registered: ‎06-13-2011
0

Re: Custom flip


squinchy wrote:

This is the type of company I'm looking for.  Too bad they're in CO and not here.

 

http://baileycustomhome.com/about_us

 


My guess is that works because there isn't/wasn't as much demand for homes there. Why would any builder want to work under somebody instructions (and belieeve me, you will give them instructions) when they know that buyers would line up? Those buyers are also likely to pay a higher amount since they are looking at a finshed product.

Silver Contributor
bld999
Posts: 476
Registered: ‎04-15-2011
0

Re: Custom flip

Start talking to some custom builders in the area you want to live. They will tell you if they are interested in that sort of approach, and if so, what form it must take for them to participate. Plan on paying for some legal fees in terms of contract drafting to protect both you and the builder.

 

None of us chickens around here can do much but speculate.

 

 


squinchy wrote:

This is the type of company I'm looking for.  Too bad they're in CO and not here.

 

http://baileycustomhome.com/about_us