Posted by michaela-ATL on September 25, 2003 at 07:19:47:
CN,
get teh contract signed, subject to inspection. Then call the ‘I buy Houses’ ads in your local paper and
off the houses.
Good luck
michaela
IS THERE ANY MONEY IN THIS DEAL? - Posted by CM
Posted by CM on September 24, 2003 at 22:59:29:
GOT a call from a friend who father has 2 junker properties in a bad area.
the properties were given to him and have just been sitting for 2 -3 years. he dont do real estate and just wants to get rid of them (1k each =2k) befor they get vandalized more.
the junkies in the area broke in and gutted and stole anything of value already.
the area comps go for 25-35k each, and he will basicly give me both houses if i pay the back water,garbage,and tax bill (total $6500 to bring both current)
both are free and clear but will cost 10-15k each (for contractors to fix each one.
he wants 1k for each house = $2000
bring both bills current =$6500
fix both houses =$25000
the market value when fixed up is 25-35k each.
so thats 60-70k retail.
i dont have that much cash 2K but i know that the city has programs for bad area repair. or i can try to do a quick flip, but i dont know any rehab investors yet. (so i dont know if they would even work that area.)
i know there is a profit but is it worth the risk?
there are home owners in the ares but it has another 2 junkers down the street.
should i pass or try to profit?
thanks
CM
Re: IS THERE ANY MONEY IN THIS DEAL? - Posted by jasonrei
Posted by jasonrei on September 28, 2003 at 02:35:18:
IF the numbers are right this is a deal I’d do- assuming no surprises.
Re: IS THERE ANY MONEY IN THIS DEAL? - Posted by Brent_IL
Posted by Brent_IL on September 25, 2003 at 09:27:09:
I agree completely with Michaela; sign it up. I think I?d look at these more closely before I wholesaled them off because this could be an excellent start. As you said, there is money available for fix-up on these properties and the purchase price will allow for a lot of mistakes.
I?d look at the area to determine how bad is bad. You don?t have to stay there. People live where they can afford to live and in areas that they are accustomed to. If there are squatters in burn-outs for blocks on end, the houses may not be worth the effort. However, if most of the people in the neighborhood are paying rent and/or own their homes, you could own one of them free-and-clear after you?ve finished. Would the junkies have forced their way into the houses if the properties hadn?t been neglected for three years?
FHA has Title l loans for repairs, and the city and county should have easy-qualifying, low or no interest loan programs also. I like FHA because when we don?t know what we?re doing repair-wise, and I usually don?t, they will not release any money or approve the loans until the plans and inspections are adequate.
It pays to shop around for contractors. Remember that on major jobs like this, licensed subs will have to sign-off, so you usually can?t have a fried do all the work because he or she works cheap.
Give the Dad a note for $2,000 due upon the sale of the first building. There?s no need to encumber both houses. He hasn?t been in a hurry for years. He can probably wait six months longer to get cashed-out.