El Dumpo--- SHOULD I ???? - Posted by Laure

Posted by Rick H(MD) on April 01, 1999 at 08:19:31:

It probably wouldn’t hurt to start lining up other investors to flip to also.

El Dumpo— SHOULD I ??? - Posted by Laure

Posted by Laure on April 01, 1999 at 07:32:50:

My carpet layer called me late last week… she knows of a house on the “north end” I can pick up cheap. Now the “north end” is not a war zone, but it is just one step above the “south end”. It’s a very old part of town and will eventaully be turned into industrial (20 years?) NO gunfire, just poor people. After 4 trips down there, I finally meet up with the Seller yesterday. The house is “not bad”, or “really not that bad” (I can’t decide!) Foundation seems solid, the roof was new 4 years ago (but they shingled an almost flat area and it leaks… needs rolled roofing there) A breaker box has been installed, the bathroom is newer, the chimney is crumbling inside the living room, plumbing is mostly replaced (although it is just hanging all over the place) and there are three boards that need replaced on the front porch. Oh, it has aluminum siding, but needs gutters and aluminum on the facia.

He was asking 15,000. He told me 10,000. Then he said, 9,200. I said “is that the best you can do?” (seminar training ! hehe) and he said 8,000. He also said appraisal was 15k last year. Nothing in that area is worth more than 25k. Rent is 275, but Tenant hasn’t paid in months. I told him I had 6k in mind and left him. He called last night to see what I had decided, and I said I’d call him today. Oh, he’ll take 1500 down with payments.

When I do the math, I want to keep it ! Section 8 will pay 450/ month for it ! But I think I’m crazy for picking up this piece of crap, and see headaches down the road.

so, get it, and advertise El Dumpo??? Contract for deed???
GEEZ… My husband thinks I’m absolutely CRAZY for this one !
I talked to a local newbie last night and he would be interested in looking at it and picking it up from me.

OK>>> Tell me, Tell me ! Should I just “DO IT” ??

Laure :slight_smile:

Re: El Dumpo— SHOULD I ??? - Posted by LHoffman

Posted by LHoffman on April 01, 1999 at 08:22:11:

First I would determine what the true market value is. If it is $15,000.00, then I would offer the seller $6500.00 with an option to buy. This figure takes into account repair, profit for you and the new investor. It also takes into account your/investors holding cost.

I would advertise it as a “Handy Man Special”. You should know within a few weeks. If you have a serious investor interested in this property. If nobody is interested you can let the option expire, renegotiate the contract with the seller.

I love doing options on these types of properties. Your risk is very low. The most you would be out is a binding deposit and advertising cost. Big whoop!!! At least you wont be stuck with the property.

Just my thoughts on the subject…

-Larry

Re: El Dumpo— SHOULD I ??? - Posted by Carol

Posted by Carol on April 01, 1999 at 07:45:34:

Laure - let me give you Dennis’ talk to me on similar subjects!
How backed up are we / our crew? If we choose to buy and hold how quickly can it be cash flowing? (we buy properties kinda like this, but get them in decent shape - section 8-able - so we don’t have to deal with them much afterwards).

If you don’t want to hold it for cash flow, why not go ahead and flip it? Heck, a grand or two is better than nothing and it’s quick and easy - and if your flip doesn’t pan out, you can back out or rehab it anyway!

The other question is, how extensive / expensive will that rehab be? Dennis pencils these out for me, I plug the figures into the spreadsheet, and we let the figures give us the answer …

Good luck, let us know.
Carol

Re: El Dumpo— SHOULD I ??? - Posted by Laure

Posted by Laure on April 01, 1999 at 08:00:40:

I have a hard time figuring what it “needs”. I am so used to higher end properties that I would likely want to gut the whole house ! My rehabs usually end up like new homes… I tend to over-do it, but haven’t gotten burned. It MUST have the roof fixed- $300. It MUST have the porch fixed- $100. It MUST have carpet- used? $500 or less. It Must have one ceiling fixed - $200. The chimney… I don’t know ! I didn’t check if it is in use, but it is crumpling and bowing out the paneling in the living room. $500??? The crew?? Well, he quit me last week. Seems his wife thinks he’s boinking another of my employees ! I have a new rehab I’m closing on today and have another that the new L/O Tenants are working “with” me on to get it painted. Oh, and I am evicting a Tenant whose rent is 150 below market rent, so it will need a kitchen in a month. She brought in 2 dogs, German Shepards, no less ! Boy ! did I flip ! OUT, says me !!

Anyway, should I advertise it as an “el dumpo”? and should I sell on L/O or contract? Which is best for me regarding legal problems? ie. city violations, or arrests at the property would not be affecting me if it were contract?

Thanks !

Laure :slight_smile:

Re: El Dumpo— SHOULD I ??? - Posted by Rick H (MD)

Posted by Rick H (MD) on April 01, 1999 at 08:11:02:

It sounds like you answered your own question. Walk your “Newbie” through the house and see if he/she wants to buy it. It’s worth a try. The only thing I would consider is that some people might try to sidestep you and purchase it direct.

If you’re willing to keep it if the newbie doesn’t want it then just buy it and move on if the numbers work.

Re: El Dumpo— SHOULD I ??? - Posted by Rick H (MD)

Posted by Rick H (MD) on April 01, 1999 at 08:10:16:

It sounds like you answered your own question. Walk your “Newbie” through the house and see if he/she wants to buy it. It’s worth a try. The only thing I would consider is that some people might try to sidestep you and purchase it direct.

If you’re willing to keep it if the newbie doesn’t want it the just buy it and move on if the numbers work.

Re: El Dumpo— SHOULD I ??? - Posted by Laure

Posted by Laure on April 01, 1999 at 08:12:45:

I’m going to tie it up this morning, do a title search and record it before I show it to the new investor.

That should take care of that !

Laure :slight_smile: