Posted by Bob-Tx on January 27, 2000 at 11:20:08:
I think you are close to a deal here but be careful about taking your contractors advise re adding on to the house. I would rather see you contract this property and flip it to someone more experienced then stay in touch and learn from how they do the project. Looks like in order to do that you will need to buy it for about $60-62k. I would not pay more than $65,000 if you plan to rehab it yourself.
IS THIS A DEAL? - Posted by Cassie
Posted by Cassie on January 26, 2000 at 21:19:10:
I was able to find an abandon house and when I contacted the owner I was informed the house was condemned by the city many years ago (when she took over her mothers bills before her death she wanted it that way to lower the taxes). The lady is the executive of the estate and is asking $75,000.00 for the 3/2 (about 1800 sq ft)and it is on about 5.10 acres of land. Houses in the area with the same info are easily in the $130 + range (without the acres). The lady states that the appraisal of the land alone was just put at about $15,000.00 per acres. My question is this would be my 1st deal and I was wondering how to handle a condemned house? I think I would just have to bring it up to code right? That would all be part of the rehab anyway. My plan would be to buy the house using hard money (if needed) rehab the house and have the land split off. Maybe to some builder or something.
Can anyone offer any suggestions about this? Is this a possible deal? Am I on the right track?
Any suggestions would greatly be appreciated.
Thanks to all
Re: IS THIS A DEAL? - Posted by Cassie
Posted by Cassie on January 27, 2000 at 07:58:44:
Thanks to all replies.
I have had my contractor look at the house and according to his estimate it will take about $30-33,000.00 to rehabb the house. Comps in the area are around $125-130,000.00 (again that is without all the acres). I live in Ga (which is a state that gives you the run around for everything)and when I called the city (2 times and spoke with 2 different people) I was told that they couldn’t/wouldn’t release info about the condemntion of the house. They told me I had to talk to the owner. She is stating that the house was condemn because the plumbing, electrical, etc needed to be brought to code and because her mom was old and sick she didn’t bother to have those things done; not to mention having the house condemned would lower the taxes. My contractor figured all that into his estimate. It’s a 3/2 and because of the high vaulted ceilings my contractor said we could put a whole loft/apt upstairs. I feel the possiblity for this house/land is endless but I do understand I am inexperience and I don’t want to get way over my head with this. I also don’t want to lose out because I am inexperience. I feel with the right people helping I can do this!!!
Re: IS THIS A DEAL? - Posted by Jim IL
Posted by Jim IL on January 26, 2000 at 22:00:39:
Cassie,
The first place I’d go would be to city hall. Ask who you need to talk to about a condemned house in the area. Ask them to look it up, and talk about the home.
Why is it condemned? What will the city require you to do to bring it up to code?
Are there special requirements for the work to be done? (as in , do the contractors have to be licensed? or approved by the city?, Permits and inspections needed? Do you need to submit plans?)
Then, if all looks good, do the deal.
You may even want to tie the place up first with a clause in your contract that allows you to bask out should you not be able to get past the city.
This way no one else can snake the deal from you.
Hope this helps,
Jim IL
Re: IS THIS A DEAL? - Posted by JoeKaiser
Posted by JoeKaiser on January 26, 2000 at 21:37:05:
While it may be “a deal,” it’s not a deal for your first time out.
You need to understand that there’s a huge difference between rehabbing and bringing it “up to code.” Huge difference, in fact. No, it’s not “part of the rehab anyway.” It’s more like starting from scratch.
If you’re able, write it up and peddle the pieces as described, but don’t break out the hammer and nails.
Joe
Re: IS THIS A DEAL? - Posted by Mark A. Nyman
Posted by Mark A. Nyman on January 26, 2000 at 21:34:08:
Cassie,
I think it sounds like there is definitely the possibility of a deal. The key is to find out about the house. I would get an option to buy the house at $75000 or you can ask for a lower price subject to certain conditions that would protect your interest and give you time to do more due diligence.
Can you save the house?
Find out what it would cost to repair the house.
Get good comps. What can you sell it for?
Call the city and ask them questions. Find out who is in charge of condemning houses and give them the address and ask what has to happen to get the house up to speed.
Sounds like the lady assumes the house isn’t worth anything and she is selling for the cost of the land $15k times 5 acres. I would find out if the land is worth that amount of money. If it isn’t then you could negotiate to buy for the cost of the land or less and the house would be free.
I am getting started using Ron Legrands method for wholesale-retail. This system includes a method for evaluating properties and making offers so you can determine what is a good deal based on what you can sell the house for when it is fixed up.
The other option might be to find someone who has experience and who will work with you on this deal. You would have to share the profit but by having someone who has done deals before can help eliminate mistakes.