Posted by Randy Banks on December 14, 2000 at 11:26:08:
PLJ, You don’t provide enough info to know if you have a good deal here or not. A question I would have is that if the home was financed where is the insurance that would cover fire damage and why isn’t this insurance curing the problem??
Anyway, with fire damaged homes I recommend that you get a remodeling contractor that can provide references that they have experience in repairing fire damage. Get them to give you a quote rather than rely on your estimates. One other note to think about…homes that have had some kind of catastrophe, like fire or flooding, even after they are repaired can be stigmatized and therefore suffer depreciation in value. Keep these things in mind when you are negotiating and use these as your bargaining tools.
I was offered a deal and was wondering if it was worth the time and money.
I was offered a deal that is in pre-foreclosure. The house is worth 150,000, buying for 99,000. The house has fire damage that will require 10,000 rehab. There is a poten. buyer who currently lives in the property and will not be able to purchase for another 12 months. He will rent with option until such time. At this time, he will pay the mortgage with no extra to me. The lender requires a 10% down payment which will be refunded after the rehab work. My profit after 12 months is agreed at 20,000 from the sale.
Is this a deal in which I should be focusing on as an investor? or does this pose potential headaches with very little profit? I need an answer so that I can make my decision. Thanks