Looking for more input - Posted by David C. Cooper
Posted by David C. Cooper on July 26, 2007 at 15:11:18:
I wanted to get some more input on a deal I posted about a week ago and a few others I’m looking at. I’m hoping one of these can be my first deal.
I used ARV (after repair value) x 70% - repair costs to figure my maximum purchase price. It turns out the numbers are so big it looks like I could even raise my max. price and still have tons of room for profit.
Being new, I plan to focus on wholesaling until I have enough capital behind me to make some mistakes with other strategies that will build cash flow and equity for the long term. Because of this, my exit strategies are to wholesale to a rehabber or walk away.
The first deal I originally posted here:
ARV $1M (million)
High end So. CA Suburb
Repairs: $120K (thousand)
Days listed: 30+
The bank took property for $788K is asking $812K.
I plan to ask the agent to present an offer of $550K.
4bd 3ba 2500sq ft.
Almost completely upgraded.
Days listed: 90+
Seller is asking $830K
I will offer $525K
Days listed: 40+
Seller wants to sell so she can buy another listing and is trying to avoid MLS to save commissions and doesn’t want to finish upgrading the property.
I plan to offer $282K.
MLS Stink House (cat smell)
Great landscaping and view.
Days listed: 60+
Seller moved out interior is all original 1980’s construction. Plus major pet smell. Needs a lot of interior work. Great curb appeal.
I plan to offer $398K.
I plan to ask seller to pay all commissions and closing costs and I will assign the contract to an investor for a small fee ($5-10K) or walk away using an escape clause.
I don’t like the escape clause, but it seems like a good tool for my first few deals and I don’t see any other options with no cash and poor credit. When I have some capital built up to back up my deals I obviously won’t need it.
So, I’d really like your professional opinions on these before I move forward. Thanks in advance.