Good Deal?? - Posted by Mike (SoCal)
Posted by Mike (SoCal) on July 11, 2002 at 14:54:35:
Here’s the story:
Boyfriend and girlfriend purchase a home. There is a falling out and they want out, period (they are motivated). They are willing to sell the house for $200,000. The comps in the area are $280,000 (verified with an RE agent friend of mine). The house needs about $15K worth of work to get it in top shape (not verified yet). This deal looks a little skinny for a rehab, but might be doable. I would like some input please.
Here are the numbers at this point:
Loan Fees (pts. included)- $7800
Holding Costs (6 mos.) $14,300
Commission at Sale (5%) $13,500
Rehab Costs $15,000
Escrow Fees $3500
Sale at $270,000- $254,100 (costs)= $15,900 profit potential.
Is this to narrow of a margin for this deal? This is my first one and is the best one I have seen in the many months that I have been looking. However, it still looks tight and I do not want to get blind sided on my first one.
My other concern is that even if I did do this deal, I realize that I can only get $178,000 from a hard money lender. But, that leaves me about $55k short to see the deal through. Any suggestions on where to get it from? I can tell you where I can’t get it from, family and friends.
Thanks for all of your help, this is a great site.