Re: flipping - Posted by Maurice (So. Ca.)
Posted by Maurice (So. Ca.) on May 14, 1999 at 13:46:15:
I am new also, but here’s what happened to me on my first deal…(this is not intended as a turn-off, but just useful info)
I found what was thought to be a pre-foreclosure through a realtor I’m working with. It wasn’t listed & was a friend of the realtor. Here’s the details described to me by the realtor & owner:
-conventional loan of $104K (they had for only 2 years)
-$1,100 monthly p.i.t.i.
-in arrears of 3 months only, but not default yet
-fair market value of $120-130k
-back taxes of approx 1,500$
The agent assured me that this info was pretty accurate. So of course I was excited. Saw the property, assessed about $5,000 in rehab work & negotiated $1,000 to the owners to walk away. I explained this would be “subject to” & I’d flip to investor (which I already had lined up).
Fell apart this way:
I didn’t do my own comps & when the buying investor did, it only came up to $110k-118K; they were really in arrears of 7 months; their original loan was sold to another loan company & data was completely lost (???); the monthly $1,100 did not include tax or insurance & this market could support a lease-option rent more than $1,100; well there’s more to this, but the bottom-line was this…I should’ve done a lot more homework. I assumed way too much & assumed that the owner & agent was more accurate.
But on the positive…I learned so much; I have 3 potential investors/buyers that I network with; a network of bird-dogs; and have met some great people out there doing the same thing.
So keep at it…