How does this offer sound on a 3BR potential flip - Posted by Frederick Waller

Posted by Shaun on February 22, 2001 at 10:41:10:

Lets see: Pay $45k, closing costs $1k, fix up $7k, taxes $2k, holding costs, 30days?-$3k, selling agent $4k, total $62k. Sell for $65k, closing costs? $2k, net profit $1k. If you want to wholesale flip it, without fixing and just assign your contract, you might make some money, but you have to find an investor fixer upper who is willing to work on about a $15k margin and most, who know their business, will not work on less than $20k net. You need to buy it at 50% or less of FUMV.

How does this offer sound on a 3BR potential flip - Posted by Frederick Waller

Posted by Frederick Waller on February 22, 2001 at 09:49:50:

Property is listed for $54K. The highest comparison price a house sold for was $69K. Most houses in the area seem to be going for around $60-$63K. This house needs removal of wallpaper and panelling, and then painted. It also needs a neutral carpet throughout. The kitchen, dining room could use some new updated flooring and the cabinets should be painted. Seller has owned the property for about 12 years. Had it listed first at $62, then reduced it to $59, then reduced it to $54 after about 8 months on the market. The taxes on the property are $1802.

The property is listed with a realtor. I told him I would not get a buyer’s agent and that I would be willing to list the property with him again after I rehab it.

I am going to write a letter of intent and make an offer of either:

  1. $40,000 with 2% seller assist
  2. $42,500 with 4% seller assist
  3. $45,000 with 6% seller assist
    If the offer is accepted, I will put up $100 in earnest money

I want to re-list it after the house is painted and new carpet, and some cosmetic things like freshening up the lanscaping, putting on a better door, etc. I will list it within a month after closing for $69,900 and accept $65,000 with some potential owner financing of my equity for a year or two ?

Any suggestions on how to tighten up this deal? What contigencies could I include? Am I thinking about all the possible ways to protect my pockets ? Today is Feb. 22, and I would like to fax him the letter of intent today at around 3:30PM EST. It is now, 11:45AM EST

Any suggestions would be great!
Thanks
Fred