Flipping a property - Posted by Steve

Posted by Bill on May 26, 2000 at 20:49:56:

Have you considered offering an allowance for the new owner to add their own garage? I would offer a reasonable amount, and let the buyer request more, up to, but not over what I could afford. Buyer’s specs could mean way more than you figured when they get through adding shelves and cabinets and skylights and sinks and who knows what else for special storage requirements.

Flipping a property - Posted by Steve

Posted by Steve on May 26, 2000 at 20:33:49:

I am ready to embark on my first deal. I have learned of a property for sale that should typically sell for about $410,000, but because it has no garage or carport it is still on the market. Garages in Arizona are important and the area where this home is located, 90%+ of all the homes have garages.

The owner has about $200,000 equity. I do not know how much cash she needs. My understanding she has already bought her new home in her sisters name.

I would like to buy this house, which I may be able to do for a minimum of $350,000. I want to add the garage, approximately $20,000, and then sell.

How should I structure the deal. Could I add the garage while in escrow and double escrow the house? Or could I use an option technique re-list the house and sell it with a garage to be built to the new buyers specs?

Hope someone is there who can help. Thanks

You’re braver than I . . . - Posted by JoeKaiser

Posted by JoeKaiser on May 27, 2000 at 01:22:18:

This is a no brainer - don’t even think about it.

Creating a $370k liability in the hope of realizing a $40k profit is not such a hot idea. And, you’ve got carrying costs, closing costs, construction costs, etc.

A real estate agent selling the same house up the street would likely make just as much, with zero liability.