Flip Question - Posted by Steve B (MA)


#1

Posted by Joe Kaiser on January 19, 1999 at 01:20:01:

Steve,

I know a couple things pretty well, and next to nothing about everything else. Artesian wells would fall in the latter catagory.

Still, I’d do the deal.

Write it up so it’s nice and tidy and then let someone else figure out what it’s worth to them to do the repairs that’ll eventually be needed. If it were me, I wouldn’t try to venture a guess or educate myself about that sort of stuff. It would just take too much effort and I’d learn lots and lots about something I’d probably never need to think about again.

So, let the other guy do that homework for you and let him figure out what it’ll take. If it’s a number that you can live with and puts food on the table, you do the deal. If not, you either rework your original deal based on your new findings, or you walk away without having wasted lots of time on a no go deal.

Joe


#2

Flip Question - Posted by Steve B (MA)

Posted by Steve B (MA) on January 18, 1999 at 21:21:37:

I received a call in response to my real estate wanted ad I have been running for the past two weeks.

The caller mentioned she bought a small cottage on a lake about 13 years ago with the intentions of making it a summer home. She never did; lives in another nearby state, and wants to get rid of it asap.

I am going to see the place shortly; however, the property was an artesian well that was dug 450 feet down with a good water supply but not yet connected; has no bathroom, and currently not connected for sewerge.

As a new investor, I was looking for advice for this scenario; if the comps are between $60,000-$80,000; and she told me she doesn’t care about making any profit on this and would be happy with $20,000 cash; how much can I allow in total expenses added on to my purchase price for this to be a good deal to flip to another investor?

Also, I would appreciate any initial reaction to your guess to the approximate costs for these 3 repairs?

I know I have a lot of follow-up work myself in investigating this property, but was looking for your initial reactions and opinions.

Thanks in advance!

Steve B (MA)


#3

Re: Flip Question - Posted by Bob-Tx

Posted by Bob-Tx on January 19, 1999 at 10:30:44:

First verify the fmv. Seems that a $60-80k range is too broad.
Next figure an estimate of rehab costs.
Then figure that an investor will pay approx. 60% of fmv after repairs.
Example -
fmv = $70k
rehab = $15k
investor will pay = $27k
You buy for $20, flip for $27k and pick up a nice check at closing.
I would say you have a hot one there. Just verify the fmv then get it wrapped up with a no risk contract.
Good luck
Bob