Posted by BillW. on February 08, 2001 at 16:02:29:
- Verify value of property. Get comps. Make SURE of final value.
- If value is correct, lock up propery with a contract subject to you confirming and approving repair costs.
- Get firm bid for repairs. Even if you plan on doing them yourself, allow plenty to pay yourself (you don’t work for free, do you?) (If you do, please let me know, I have lots for you to do!)
- The margin looks pretty thin. You could get hard money at probably 65 percent of final value, but that’s only 39K -no room for repairs. Ask seller to either lower price or carry financing . If investor won’t lower price or carry financing, you may need a partner for the money.
Generally, it will cost you about 5 to 9 percent of final sale price to sell the property, so you don’t have much room here.
If you do this deal, start marketing the day you sign it up to someone who wants a fixer and will live in it as is while fixing to make some sweat equity. Don’t market to rehabbers (there’s only room for one in each deal) and don’t market as a retail deal unless 100 percent done and ready.
Just be careful and check out the numbers real good. This one might be too thin if you need anything other than minimal work on it.
Good luck,
BillW.