Posted by Kent C on February 19, 2002 at 04:53:33:
I smell $20k fixup money in this place, paying others to do ALL the work anyway. Those windows can cost $150 ea + $150 labor or $300 x 20 windows perhaps = $6k alone!
I’d go for bidding $70k with a mention of the money you will have to sink into it. Settle on 90k with them holding a second on a 24 mo balloon. Get a first from a bank for 80% of the purchase cost.
Put 20k into it, mostly farming it out while you go look for the next one. Line up hard money lenders for the fixup money and keep your cash in the bank for emergencies. Be done at $110k.
Go get an appraisal around your $170k mark. Get an EASY refi loan at the 80% level ($136k). Put the $26k with the other 10k you have in the bank. Meanwhile put this house up for sale to get the rest of your money out. But you have money to make payments with now. You are also ready to do another deal and NOT require either the 2nd mort or the hard money lender, your choice. But ALWAYS keep some money in the bank…sh_t happens.
Note that you paid off the hard money people at refi time.
The HARDEST thing here is not the math. It will be compiling the list of vendors to work for you and managing them…let the fun begin.