DG Fam...What do you think??

DG Fam...What do you think??

Hey DG Fam,

I have a property under contract in the ATL for about 2 weeks now & it's not looking promising at all. The issue is the asking price & the ARV. See details below...

4Br - 2Ba SFH
ARV - 110K
Cost of Repair - IOK
Asking Price - 55K
Equity - 45K
Sqft - 1158
Lot Size - 5001
Built - 2004

Here is the problem...when I asked the seller how he arrived at 120k for the ARV, he told me by comps. I ran the address through zillow & it came back with an estimate of 110k. Looking at the #s it looked like a good deal so we went forward with the contract. Now, I've gotten a few responses about the property but they were all curious about how I arrived at the ARV of 110k. I told them by comps & they were saying that the ARV is inflated.

I recently ran the address through Dean's totalviewrealestate & to my surprise it came back with an estimate of around 54k...that's 1k less than the asking price. I told the seller about what I've discovered & he is saying that he is not budging on the asking price or else he'll be losing money.

Now looking at the #s it seems as if there is no equity at all in this deal if I don't drop the asking price. DG Fam, what do you think I should do with this deal?

D'Angelo

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"A Winner Never Quit And A Quitter Never Win!"


Don

I would see if you could have a realtor perform a BPO, which is a Brokers price opinion.

Is there a recent appraisal available, from the past 60 days? I am assuming there is not one.

I have not used Zillow but I have heard it is at times not reliable. Comps are more reliable because they contain information more related to the area.

Please be aware that if the property sells for less than the actual value, the price it is sold for becomes the new value.


Don

Whats your exit strategy going to be?


a comp is not necessary a comp

If you use Zillow or something like it for a comp/appraised value, keep in mind that doesn't mean that number is correct. A true comp, is looking at the surrounding sales in that neighborhood of the same type of house, 3 bed/2 bath/2 car garage with 1700 sq. ft. living area etc. You have to go by real numbers because that's what kind of offers you'll receive; & if the numbers are not correct, you won't make any money. If that's the best price from the seller, then move on & find a better deal. It's better to have a deal where the numbers work right from the start, this way everyone can make money, you can't expect to close every deal.


Contract becomes null after 30 days...

jimmybtx wrote:
Whats your exit strategy going to be?

The seller understands, it's in the contract, that if I don't get a buyer within 30 days the contract becomes null & also, there is a clause stating that I could get an extension if the seller agrees. At the moment i'm focusing on FSBO's so i'm not using a RE agent so that I could get a BPO.

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"A Winner Never Quit And A Quitter Never Win!"


Don Angelo -(What do you think)

Contact a Real Estate broker and ask them if they would run a CMA on the
property and email you the results its free.An CMA is a Coparative Market
Analysis,also give them your info on the property,and explain what the
seller is telling you. You can also go to the post-Rehab & Fixer-uppers
an download and use the Investment Deal Analyzer and see if that will help.

whurndon


How about turning it into a lease option

Would the seller change the way he is allowing you to purchase it to a lease option? My guess is with Atlanta being so hard hit that there are buyers out there that would love the opportunity to get into a property when there credit is in the trash.

Just a thought,
Susan

__________________

Susan

Don't take no for an answer!
Don't live in the gap!
Don't give up!

You can follow my progress at: http://www.deangraziosi.com/real-estate-forums/investing-journals/54148/...


That's what I was thinking...

gceriani wrote:
If you use Zillow or something like it for a comp/appraised value, keep in mind that doesn't mean that number is correct. A true comp, is looking at the surrounding sales in that neighborhood of the same type of house, 3 bed/2 bath/2 car garage with 1700 sq. ft. living area etc. You have to go by real numbers because that's what kind of offers you'll receive; & if the numbers are not correct, you won't make any money. If that's the best price from the seller, then move on & find a better deal. It's better to have a deal where the numbers work right from the start, this way everyone can make money, you can't expect to close every deal.

to move on. I think from now on i'll be using totalviewrealestate.com because it gives you everything you need to know if it's a good deal or not...comps & all. I want to master this virtual wholesaling.

__________________

"A Winner Never Quit And A Quitter Never Win!"


I'll see...

whurndon wrote:

Contact a Real Estate broker and ask them if they would run a CMA on the
property and email you the results its free.An CMA is a Coparative Market
Analysis,also give them your info on the property,and explain what the
seller is telling you. You can also go to the post-Rehab & Fixer-uppers
an download and use the Investment Deal Analyzer and see if that will help.

whurndon

I don't have a RE agent at the moment because i'm focusing on FSBO's. I'll try & see if I can locate 1 before the contract runs out.

__________________

"A Winner Never Quit And A Quitter Never Win!"


I'm assigning the property..

sboeve wrote:
Would the seller change the way he is allowing you to purchase it to a lease option? My guess is with Atlanta being so hard hit that there are buyers out there that would love the opportunity to get into a property when there credit is in the trash.

Just a thought,
Susan

so i'm just looking for a buyer to hand it off to.

__________________

"A Winner Never Quit And A Quitter Never Win!"


I want to thank all of you

I want to thank all of you guys so far for the feedback ...I really do appreciate it. I'm still open for more inputs.

D'Angelo

__________________

"A Winner Never Quit And A Quitter Never Win!"