Posted by JamesL on February 20, 2002 at 12:36:30:
nt
Possible deal, Help please!!! - Posted by Trisha
Posted by Trisha on February 20, 2002 at 07:10:32:
Hi everyone, I need some advice on a possible deal. It is a brick duplex 2br 1ba on each side. The tax vaule is around 73k and the owner wants 65k. I offered 52k and he pay half c/c. He accepted. He told me that he filed for bankruptcy and that he should have everything straight with the property in 30 days and be ready to close. Property needs only minor repairs and no roofing or plumbing problems. My intention is to flip this property and take a 5 to 8k profit. When fixed property should appraise for 75k. I have signed the contract with him and made the closing for the end of april. Some advice guys whould be good. Thanks
Trisha
Re: Possible deal, Help please!!! - Posted by Kent C
Posted by Kent C on February 21, 2002 at 04:09:36:
AW I like your thinking. You are on track. Multi units sell to investors not home owners. Investors rarely give more than 80% of FMV. We want a bargain or no deal. Always assume FMV at the lower end. If this hse ranges from 65-75, use 65. So if it appraises at $65 k, 80% of 65k = $52k selling value. Dont forget you incurred closing costs too. This is NO deal.
My first question would be “what does he owe”? If he has $30k equity and is going bankrupt, he WILL sell cheaper. But since you have already accepted something, you may do good to get away from this deal with your earnest $ (and skin) intact.
Kent C
Re: Possible deal, Help please!!! - Posted by AW_(WI)
Posted by AW_(WI) on February 20, 2002 at 10:19:48:
I am a wannabe/newbie investor myself and have recently been looking at duplexes as well. My thoughts on doing a flip with a duplex is that it would be difficult to get much of a profit. It would seem that people in market for a duplex would more likely be an investor and would want to get the price near what you will be buying at. So I would go in having a buyer lined up or make sure income would justify holding for a while. SFH, more likely to get a profit on flip to regular Joe wanting a house. Am I on track here?
Re: Possible deal, Help please!!! - Posted by jim
Posted by jim on February 20, 2002 at 09:45:49:
If he filed for bankruptcy, I would be wary of EVERYTHING. Get a good, reasonably priced real estate attorney to help you with this one. I would not go it alone.
Re: Possible deal, Help please!!! - Posted by SueC
Posted by SueC on February 20, 2002 at 09:42:47:
If the seller is in bankruptcy, the sale may have to be approved by the bankruptcy court. Ask the seller if you can talk to his bankruptcy lawyer to find out what the procedure will be.
In addition, you need to make double sure about liens on the property, have you ordered a title search? Does your agreement have a clear title contingency or a bankruptcy discharge contingency?
I’m also a little concerned that you’ve used the “tax value” whish is not the same as the market value - what are the comps on properties like this? Is the property rented, and what are the rents he’s getting? Just some qustions to ask.
Re: Possible deal, Help please!!! - Posted by wpage
Posted by wpage on February 20, 2002 at 09:41:16:
Trisha
Hope you have not given the seller any cash up front.
If he has filed bankruptcy how come the property is not
included? Before trying to find a buyer to flip to you
better make sure that you are going to get to buy. lol