OfflineWell thought I'd post the progress on this deal I'm working on as it is a little unique in the approach. My wife is a personal trainer and a co-workers parents passed leaving him a property in desired location, needs work and has been sitting. She put us together and met him at his property yesterday for walk through (with FLIP camera...nice tool!!) to discuss with him and ask questions and see motivation. He is ready to let go as it is costing him money....
ARV - 170000
Rehab - 35000
Profit - 30000
Asking price - 130000
Math doesn't work but he is motivated, so mentioned to him that my intention was to fix and turn over the property and that I would need him to consider owner financing entire purchase price while I renovate and sell and with the agent there he agreed!!! So I will get the rehab dollars from multiple private investors and he will finance the purchase of the house 100%
I'll provide an update once we meet to discuss my rehab budget and offer price of 100,000....hope it goes!
Luck is when Preparation crosses paths with Opportunity!
This could be a good deal IF!
You sell it for $170,000
Your rehab comes in at $35,000
Selling costs, closing costs 9% = $15,300
Money costs, insurance, utilities cost over runs, Monthly payments to homeowner, these are numbers you have to subtract from what you list as
profit (gross profit I guess)
Lets just say 3 months hold time $1000 per month including rehab PM and $1,000 for insurance, utilities (low)
$4,000
That is a net profit of $15,700 with only $4,000 out of pocket. This is just a guesstimate on the exact cost you will pay monthly for the owner carry financing and the private money to do the rehab. A 392% ROI!! So you will have to determine money costs to the penny for a 3 month hold before you know what you will actually net on the deal. Don't forget insurance, utilities, surprise rehab expenses, any extra monthly payments every month over 90 days the property does not sell.
Could be a great return on you money that's for sure.
Hope it goes for you!
Michael Mangham
MD Home Acquisitions LLC
Knowledge is power, but execution trumps knowledge. Tony Robbins
http://www.mdhomeacquisitions.com Seller site
http://www.mdhomeacquisitionsbargainhouses.com Buyer site
http://www.mdhomeacquisitionshousehunter.com Bird Dog Site
http://www.mdlodeals.com Tenant/Buyer site
I like the idea of the seller holding the note. Good thinking here not to tie up more funds than you need to. Michael is right with the numbers if you can get in and out within a 3 month time frame. All in all looks like a sweet deal. Good luck, the clock is ticking.....Jan