Comps for a major rehab on a REO

Eric,

One word of caution: DO NOT build this home up above what the other homes in the neighborhood have. Make sure people are buying 6 bedroom homes in that area. One of Dean's biggest cautions is don't buy a house that sticks out above the rest of the neighborhood.

As far as comps, have your real estate agent pull comps of homes that are in immaculate condition because, essentially, that is what your house is going to be once it is rehabbed. Hope this helps!

Vincent

We have built some "spec" homes in the past ... vacant 1 ac. lots we bought in foreclosure, then had a builder put up the home & just wrote checks
for each draw until complete. These houses we sold in $ 250 K area, & the last one we made 104K profit.
We wouldn't undertake a 200K rehab, unless it was a $ 800K house...& in this market those are not jumping off the shelf. I also agree 6 bedrooms is pushing it as far as buyers go; also you do not want to be in the best house
on the block.

Thanks for all the info!

I think I may have to let this one go....

I have another deal I am going to check out Monday.

Eric

Yeah I agree why dont you try looking at the deal one more way before you drop it. What about if you tore it down and built a new one that fits in better with the area. Just a thought.

Eric,

Good to hear you're disciplined enough to walk away! What was the determining factor? What we told you?

Vincent

Unless you can get over 350K minimum on the sale of it when your done, I'd run from that. I wont make an offer unless I can get a minimum of $50K profit for myself or the investor I assign to can make at least 50k.

What location are you doing deals at, & how many deals have you completed
this year ? We been doing this over 10 years full time & if we just did deals
that we made 50K or more we would have packed it in long ago ... & you can see
in Dean's book, we made over $ 500K profit. People must keep it real, Dean is the 1st to say, this is not a "get rick quick" program. You can make it big time by "getting fat on skinny deals. As Greg Murphy says, don't be greedy, "leave some meat on the bone".

Wow! I can't wait to get to that point..I am still tring to land my first deal.

Eric

We have had deals that we have only made $ 5K & the best was a spec house
where we made $ 104K & sold it in 2 days... but that's the extreme. If we make
20% or better, & have made up to 70% return on our investment. The important
thing to remember is that a profit is a profit.

I was trying to say that if I'm going to buy that deal, do the rehab myself, I would have to come away with a minimum 50K profit. I'm doing this out here in California and I didnt mean to come at you like I was telling you what to do. Sorry if I sounded a jerk. Didnt mean to come off that way.

When rehabbing, for every dollar you put in you should get back $2. If you're not doing that then you're not rehabbing correctly.

KimmyJ
Press on...

If I'm going to sink 200K into a rehab, its not going to be with a goal of profiting only $5000. Tearing it down and rebuilding would be a much better option.

I'll get someone to purchase it before repairs if possible

Hit me up with your info and i'll call you

The price dropped again!

Hard money lenders think I am crazy as a newbie taking on a huge rehab.
They tell me to take on 20 to 30k rehab deals.
I was also told by one that I need good credit to get a loan.

The banks new price is $109,900.00...
Thats a another $8,000.00 price drop....

As I said before, I have 2 more deals I am working estimates on...I just looked at the listing and saw the price drop.

Eric,

Then lowball the heck out of it. What did you say the property was first listed at?

Vincent