What can I do with this? - Posted by Janette (KS)
Posted by Janette (KS) on March 13, 2002 at 23:21:49:
I am a newbie who is trying to learn the ropes. I’ve been reading like crazy and trying to learn. My mind is a bit like mush right now with all the new info, so I’m not exactly sure where to start and how to evaluate this. My realtor gave me the following info…
“I do know of a great home that is a bank foreclosure on the market right now. It’s absolutely great! I’ll send over the sheet. It’s on the market for $139K and the county appraisal is $146,900. I know it could be had for lower than $139K. Probably $135K or maybe even a little less. I’ve seen it and it has a great floor plan! It’s a 2 story. It says its a 3 bedroom but it is a 4 bedroom. It has a fireplace in the family room, deck off the kitchen, fenced back yard, the basement is already studded and ready for sheetrock! It is a little rough, the carpets need heavy duty steam cleaning, but they are all neutral beige. It’s actually kind of mauve color on the exterior and has an adorable front porch with cute victorian trim. If I needed a house, I’d buy this one! With a little TLC and in 2 years it will easily sell in the middle to high $150s. Didn’t mean to go on about this house, but it’s in a good neighborhood and would have good resale or rental appeal.”
I have no idea what to do with this info, or the best way to proceed. I’m not even sure what questions to ask. If I want to flip it, either wholesale or fix it up myself and sell it retail, what exactly do I need to look into number wise. How do I work the numbers to know if this is a good deal or not, and what more info do I need. Is this the same info I would need if it is to be used as a rental? (I really would like to eventually do the buy and hold thing, but we don’t really have any cash reserves and I would like to build that up some.)
What do the numbers need to be if I want to fix this up and retail it? I know that I need to find out the comps. Whate else do I need to find out? What kind of creative financing do you do with an REO? I will continue reading and looking for answers, but can anyone give me some direction? I don’t want to miss my first deal because of “anysis paralysis”, but I’m just not sure how to start to evaluate this deal in the first place.
Thanks for any direction or advice that you can give me!