Posted by Monique on May 01, 2000 at 12:20:06:
Curt,
Make the term 18 months AND include an option to have up to three extensions for 12 months each. You can make consideration for these extensions $500.
In other words, if at the end of 18 months you still need more time, you can pay the seller $500 to get another 12 months, up to three times.
Good luck with the deal!
Monique
Experts Opinion Needed - Posted by CurtNY
Posted by CurtNY on May 01, 2000 at 08:43:11:
Last week I called on an ad in the paper. Handyman special, possible owner financing $80,000. call xxx xxxx. Figured it was probably an investor, so I called to see if they would be interested in flips. Well I was wrong, a couple owns the house, heres the details: Built in early 1800’s, 3bd/1bth. NO Mortgage. The owners tried a lease option but the buyer tenant never finished the repairs and the repairs he did make wouldn’t pass inspection anyway. Not interested in another lease option (don’t think it would work anyway-too many repairs needed) Told him I would fax over an offer (preferably two) this afternoon. Here’s my thoughts:
ARV: $115,000-$120,000 (three solid comps in same neiborhood)
Repairs: $45,500
1st Offer: $500 down, All Cash $36,214.00 (looks better with all those #'s)Contingent on buyers approval of home inspection
2nd Offer: $1,000 down, $50,000 purchase price, owner holds a mortgage for 9 month balloon, no payments. Contingent on buyers approval of home inspection (I’m not so sure about the second offer, but with the high repairs I won’t be possible to make payments. Any suggestions would be greatly appreciated) Well let me know you think.
Thanks
CurtNY
Is this your first rehab? - Posted by SteveA (FL)
Posted by SteveA (FL) on May 01, 2000 at 12:12:49:
$45K is A LOT of repairs for a first-time job. Robyn Thompson (www.robynthompson.com) who has done hundreds of rehabs, teaches to keep your first one under $10K in repairs. Good luck!
Re: Experts Opinion Needed - Posted by Soraya
Posted by Soraya on May 01, 2000 at 11:52:48:
Does time seem to go FAST for you? If you really want to see it go fast have a 9 month balloon payment. If anything goes wrong with your timing on getting things done you may have a problem. If you are going to have other people work on your property besides yourself then you are taking a risk. Many lenders wait until the time frame for Mechanic’s liens have expired before they will loan on the property.
MAKING THE OFFER TODAY, ANY SUGGESTIONS? - Posted by CurtNY
Posted by CurtNY on May 01, 2000 at 11:26:55:
PLEASE! I always like to have a second opinion.
Re: Is this your first rehab? - Posted by Mark-GA
Posted by Mark-GA on May 01, 2000 at 12:21:18:
My first rehab was a major one. I estimated 30K and I am ashamed to say how much I have in it. I am still working on it 13 months later.
Fortunately, it’s in a good area and I will end up OK in the end. It could have been much, much worse
I would stick to 10K or less for the first few. They are so much nicer.
THANKS, - Posted by CurtNY
Posted by CurtNY on May 01, 2000 at 12:08:07:
I guess I should make the term 18 months just to be sure.
Re: MAKING THE OFFER TODAY, ANY SUGGESTIONS? - Posted by Bill (OH)
Posted by Bill (OH) on May 02, 2000 at 06:44:53:
Curt, I wish you the best of luck and let us know how this deal turns out. My advice is to overestimate the amount for repairs needed and time to repair—at least for this deal. It sounds like you are going to have to re-do the previous repairs and who knows what else you’ll have to repair. I’m rehabbing a three family right now, and am having some real surprises. Two of the units are coming along well and haven’t been too much of a problem.
The third unit is a mess that I’m almost having to rebuild in places. Yesterday I took a clapboard off so I could purchase replacement boards for as a number of the clapboards around the window looked like they needed replacing. Then I discovered that the boards going up to the bathroom window didn’t have their ends anchored to anything! The @#$%$# fools that did this just nailed the trim over the studs and left the ends hanging loose, and didn’t seal it. So, there’s water damage and I’ll have to rip the whole area off and rebuild it. So, like I said, always figure on finding a nasty surprise or two…