Re: killed another first deal? - Posted by michaela-ATL
Posted by michaela-ATL on October 12, 2003 at 07:10:42:
You have to work backwards: Who would you be wholesaling this to? An investor? at 195K (incldg 10k repairs), that would be 83% (if 235K is a valid appraisal. A seller’s appraisal doesn’t mean a whole lot. In Grant Park a brick bungalow with the same bedrooms and baths and sqf will be the same value on paper, but won’t get near as much as a framed victorian)). I can’t see any investor buying this. It just takes too much money for too little potential return.
An end buyer? You know the market here is very, very slow. Most houses don’t sell for asking price. there’re a ton of hosues on the market. If you promise to get the funds within 30 days, how would you do that? You would have to get a contract now in order for a normal retail buyer to close in 30 days. That would not be the likely scenario.
Lease/option? You would not likely find someone to put down 50 or 60k for the option to buy the house sometime in the future.
Have you wondered why he got an appraisal 2 months ago? Normally people don’t get one, unless they’re refinancing. Did he try and got turned down? Who was the appraisal made out to? Him or a mortgage company? Did you drive by the comps and compare them? Maybe he can’t get a refi due to a new job? Ask him why he got the appraisal. Maybe he’s been trying to sell on his own and hasn’t been able to.
You need to do your own comps and then renegotiate the price to make it work. If you’re trying to sell it to an investor, then keep in mind, that most might use hard money and won’t get more than 60-65% for purchase, repairs and closing.
Maybe you can do this a ‘sub to’ with cash 2 years down the road? Or a sandwich lease/option?