is this a deal? before we make a mistake or not? - Posted by Joe

Posted by Tom-FL on July 23, 2003 at 20:21:18:

Well, 100k is way too high unless you want to live in it. A lease/option could work too, but it’s skinny.

The first thing you need to do is rein in those comps. 20k variance is too much in that price range (18%). Try to nail it down to 5k or better.

Now, for argument’s sake, lets say you peg the comps at 120K (Fully repaired, market ready):
ARV * 70% - repairs - wholesale profit = Max offer
84K - 3500 - 5000 = $75,500

If you wanted to wholesale it, you should settle at 75, and start much lower to leave negotiating room.

Buying at 100, and selling at 110 is not an option. You’ll be at break even after closing costs and a few payments. That’s without even repairing anything.

is this a deal? before we make a mistake or not? - Posted by Joe

Posted by Joe on July 23, 2003 at 16:55:19:

My friend looked at a house that is being sold by another investor. House was in probate and a rehabber bought it then sold it to this current investor.
He wants no less than 100K for it and the house needs some updates. I’d say 2K-3500 bucks worth of updates if not more, which this guy is willing to offer to do.
Its comps in the area are anywhere from 110K-130K.
This would be the first deal done and neither of us have much money to work with.
To me its not a clear deal (ie. lease option or a wholesale deal) My friend is just looking at the end money to be made. This looks more like we could option it and sell it right away, but that would be it and neither of us have experience marketing properties.
Let me know and if I forgot anything sorry, I’ll try to get it.