Posted by Joe Kaiser on January 19, 1999 at 10:23:51:
I’m not going to spend lots and lots of time figuring this sort of thing out. In a perfect world, you’d have bids that give you a general idea of what the repairs are going to cost, and that’s often a good way to go.
However, just as often there times when something else comes up, be it repairs or zoning questions or any number of things I have no desire to become an expert at, and whenever I run into those situations, I’ll let someone else’s brains figure it out so I can get on to other things myself.
Every flip deal is unique. The cookie cutter is a myth. And although I prefer to have everything squared away prior to sending an investor or retail buyer over to the property to take a look, in those situations where there’s just too much funky stuff going on (artesian wells being one of them for me anyway), I’ll just take my best shot by getting it tied up and letting them figure out if it’s worth doing.
Flips(Joe Kaiser please respond) - Posted by CThompson
Posted by CThompson on January 19, 1999 at 09:07:29:
I do not know a whole lot about flips, actually I don’t know anything, but I read your response to the flip question and I was under the impression that in order to do a flip properly, you would have to know what repairs are needed in order to know how much the other buyer would be willing to pay in order to know if you are offering the right amount to the seller. Am I wrong about this? Please let me know because I am trying to nail down the proper procedure for flipping.
Re: Flips(Joe Kaiser please respond) - Posted by Ed Garcia
Posted by Ed Garcia on January 19, 1999 at 13:03:13:
CThompson:
Much of your answer is in your question.
The considerations in working a deal are much the same regardless if
it is a flip or not.
Where the deal becomes a cookie cutter is the way you approach it.
What makes each deal unique, is the deals circumstances, and the out
come.
Your doing this for profit.
You take the market value minus the cost of purchase, minus deferred
maintenance, minus marketing and debt service expenses.
What?s left over is your potential profit.
Now at that point you can decide any number of out comes.
Do you want to keep the property ?
Do you want to fix it up and sell it at Market price or close to ?
Do you want to fix it up and flip it leaving some profit in it for the next
guy ?
Do you want to sell it as is, or flip it as is ?
But no matter what you want to do with it , you have to understand what
makes it?s a deal.