Posted by Jimmy on April 17, 2007 at 07:08:13:
I figures the ARV to be around $182,000. and I figured the rehab budget to be around $20,000. but no inspections were allowed, which infused a risk premium into the calculus. I had to leave myself some room for (a) underestimating the rehab budget, and (b) profit.
all it would take is to learn that the CHA needs to be replaced, ot that the place had water/termite damage, and the profit could be slashed or rubbed out. and there was no way to know.
as for the financing. the terms are published online. go to www.hud.gov and click on “houses for sale.” there, you will see links to 6 or 7 federal agencies with properties for sale. click on the IRS and go to their list. in this particular deal, I would have had to hand over a cashier’s check for 20% of my winning bid within 2 hours, and the balance in 30 days.
this arrangement keeps a lot on investors away (which I like).