Posted by Lori Samson on May 23, 2000 at 17:10:15:
Donna,
You are right about the interest rates and they are effecting rehabber’s except… if your are wanting to do a true flip to another investor(quick cash and your out). I am in one that I finally stopped trying to sell and I just lease optioned it out. I do the contract with them in a few hours. I borrowed private money to buy it and also was able to borrow the repair money as well. I have had 4 contracts fall through and I’m tired of the holding costs. If I lease option it I don’t have to pay an agent commision or their closing costs and lower my price(which is what we all do after a few months holding costs and we watch the profit dwindle) to insure a sale. If I refinance I will make about 6-7k and then the 3500 my lease purchase buyer will put down tonight. That’s 10,500. and I have my monthly cash flow and I still have the 10% of the appraised price still intact when it finally does sale (when they exercise their option). If I would have had my last contract go through I would have got about 14k on the sale. I’m still close to that and still have the equity of about 10k on the tail end of this deal intact. I feel you can kill yourself if you hold too long or panic and sale too cheap just to make it sale. If you buy fix up and resale on a lease option you can get that debt serviced. It does NOT work if you have 10-15k in the deal yourself and need your capital back to keep in business! Good luck Lori