Good Deal?? - Posted by Mike (SoCal)

Posted by PBoone on July 11, 2002 at 15:13:27:

Wheres the beef? I mean deal?
Give them walking cash, take over payments then sell.The amount of walking cash will be up to your skills. my suggestion? as little as possible like $1000.00 each
an amount after your rehab and resell. GET THE DEED IN YOUR NAME BEFORE TAKING ON THIS PROCESS!!!
PS - the deal starts to look attractive @ $195K IF your comps are correct and the market is moving in the 280K arena

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:
Purchase- $200,000
Loan Fees (pts. included)- $7800
Holding Costs (6 mos.) $14,300
Commission at Sale (5%) $13,500
Rehab Costs $15,000
Escrow Fees $3500
Total- $254,100

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.

appraisal value - Posted by Donald

Posted by Donald on July 12, 2002 at 04:01:26:


Double check the numbers here:
Are you sure it will ‘appraise out’ at about 280K?
Also, you don’t have to put the full 15k into it to re-sell.
Say, you only put 3k worth of rehab into it and put it back on the market at 250k.
Just a thought.
my 2 cents

try to buy it - Posted by Donald

Posted by Donald on July 12, 2002 at 03:52:19:


You can swing this–because they are motivated sellers!
I would not attempt to L/O it, I would try to buy it.
Assume the lien and give them some cash.
How much is the 1st mortgage?
If you have no cash take a partner.
my 2 cents