My First offer Accepted!!!

thank you!

Linda

Michael,

#1 prop:
ARV $82,666
Asking $55k
Offer $29,970
Rehab $35k
Closing/Holding/RE costs $7935.36
My profit $2000 included in wholesale price
Wholesale $31,970
This is a hold prop. Good Rental area $1000-$1500

#2 Prop:
ARV $141,660
Asking $124k
Offer $99,330 after counter. *this is where I messed up on this one...I typo'd 99,330 when I meant 96,330! Lesson learned!
Rehab/updates only $20k
Closing/Holding/RE costs $12,747
My profit $3000 included in wholesale price
Wholesale $103,330
Good for rental or fix & sell. I'd hold this one

I will consider reducing my profits if necessary. We'll see!

Thanks,

Linda

Did the seller's agent give you the rehab cost or did you had to figure that one on your own..just wondering

I did the estimates.

Linda

Using your numbers here, from your buyers perspective.
Deal #1
Sell it for $82,666
Selling costs $7,935.36. Did you include taxes, insurance, utilities?
Rehab $35,000
Buy price $31,970
Net profit/equity $7960.64 11.8% ROI, beats the stock market!

Like you said a buy and hold deal would be better on this one.

Deal #2
Sell it for $141,660
Selling costs $12,747
Re hab $20,000
Buy price $103,330
Net profit $5583.00 4% ROI. I would withdraw your offer on this one.

This is what I would have offered on each one.
Deal #1
Offer $22,886
Wholesale it for $26,999

Deal #2
Offer $79,162
Wholesale it for $86,245

Cash buyers would consider these prices. Your offer might not get accepted, but paying too much serves no purpose either!

Linda, look how far you have come in such a short period of time!! Soon, you will know how to evaluate properties and get them under contract for a price that will WORK!! If not, on to the next, keep that pipeline full!! What an education you have gotten on these two properties. You are in the real world now.

Congratulations,

Michael Mangham
MD Home Acquisitions LLC

Thanks for the feedback. I completely understand. As a matter of fact, I spoke to an investor who called me on Deal #1 initially. I told him about #2. He pretty much told me what you just said about buy & sell pricing. Good thing, I'm gonna start looking for deals for him to wholesale to!

I will tell my RE agent I'm gonna withdrawal my offer on #2. Probably best. Not to pursue and waste any more time.

Thank you very much for your help.

Greatfully,

Linda

did you have a general contractor do these estimates or did YOU do them? If so any tips? I'd like to save on my contractor fee if I can figure out how to estimate properly or at least pretty close. Heard of some computer programs just not sure what always to look for (sure will feel dumb for this after finish my first few deals probably easy). I'm still learning myself ^_^ as never done any rehab work ever.

On the "Closing/Holding/RE costs" part what does RE mean? Real estate? or something else? sorry just lil confused...

Hey congrads to you for taking action, I to also been taking action and will soon have that first deal done and behind me, Thats the toughest part getting that first deal done, keep moving forward.... action+knowledge=success.....

RE costs refers to Real Estate Agent fee.

Good Luck

Linda

Thank you, Michael! That clears up so much confusion. It's obvious how to tell a good deal from a dud.

"Net profit/equity $7960.64 11.8% ROI, beats the stock market!" & "Net profit $5583.00 4% ROI. I would withdraw your offer on this one." how did you come up with that? I got 9.6% ROI with your numbers and 9.4% with mine. Ours did match if rounded up on the second for 4% ROI also over all can't figure out where she put wholesale fee, will look at past posts to find it...

From what I see I got for Deal #1
82,666(ARV)-7,935.36(sell/holding cost)-35,000 (rehab cost)- 31,970 (bid/bought price) = 7760.64 (profit) and not sure where the wholesale fee is included?

From what I see I got for Deal #2
141,660(ARV)-12,747(sell/holding cost)-20,000 (rehab cost)- 103,330 (bid/bought price) = 5583 (profit) guessing this is the profit for the end buyer and not your wholesale fee so where is the wholesale fee included? Guessing maybe (sell/hold cost)? At least the numbers matched this one, maybe typo on other?

okay I see found it, and I also understand now this is from the point of view from the end buyer. That makes sense now. The wholesale fee is in the bought price. That makes more sense now.

Though still confused on the 11.8% ROI vs 9.6% that I found with the same numbers you used vs the 9.4% with my own, like said thinking just a typo...if not can you clear that up for me? ^_^

I have attended your seminars and read all real estate books. Now I think it is time to take some action.

Linda good for you take action. I can see you have great answers. Wish you best and make it happen.

Update...I withdrew my offer on the one deal and the other was rejected due to my exit clauses in the contract. The owner really wanted to sell by end of year, and if I could get out of the contract that would not help them.

Soooo, on to the next deals!!!

Best wishes.

Linda

Well I'm going for my first deal today so hopefully that will work out well. I am sorry yours didn't but, if you are anything like me, we have both learned so much from this with the research and the help of our DG family here we are on our way up! Keep us posted on your next deal and I'll be doing the same ^_^