OfflineI looked at a property in Cincinnati. The outside looks great and only needs a minor paint job and grass cutting. The shed and Garage need to be removed as they are falling down! The property inside is from 1928 and asking only 36,000. A normal 3/2 house.
Here is the catches three people to sign contract as they are all siblings. Back taxes due, and while they were showing the property to a gentle men or rather thug i should say he came back and stole all their copper pipe.
This would be my first contracted house using no money down technique that Dean Teaches! Three contractors have looked at the property and backed off, and two couples could not get a loan or it would be gone. I stumbled on this property and need some help pulling the trigger on this. The fact the contractors backed off concern me.
Details:
$36,000
ARV $70-$75,000 and i think i can get it for 30,000 sell to an investor for $45-$50,000 and make this deal work.
I need some thoughts as if this is a good deal or just hope since its my first. The missing pipe and three contractors grab my attention! Any thoughts are much appreciated.
Promeric
Shawn, I think with the house in the condition it is I would instead bid $15K as a starting bid, remember there are some pipes missing. However, I will suggest not putting back in copper pipes. These guys steal them and sell to buy drugs. You should at lease get the property in enough condition to flip to an investor and make a nice little profit. All the best, go for it. First deal, here it comes. God Bless.
Sandra
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Hi Promeric,
If you know that this house can be sold for 45K-50K, I would say go for it but the bid concerns me a lit bit. I would probably an offer of 18K-22K to begin the biding. Becareful not to offend the sellers if this is your first deal.
Good luck
Baria
Baria
I would love, in writing, how to buy and sell notes. Not sure how to do this step-by-step. Is there a coach for this?? I am a "graduate" of the success academy...could I call the mentors about note buying/selling?
Linda Ann or Miss Tish
I am, and always will be, both a student and a teacher. My mission is to earn in order to help people find homes they can afford to both maintain and enjoy.
Baria,
I know and the owner and i talked for a bit and she is having to split the asking with her other siblings and out of her part having to pay the back taxes, electric, and gas so creatively i think the offer is ok normally i agree lower but she cried on me and everything really made me think of those magic buttons dean talks about so my thinking is this. I get the property locked up for thirty then pass it on and at the end ill end up cutting her a check to help with taxes and so forth because i want to give back. I know deep down that aint normal but something about this owner really struck me to help all in while making a nice profit. Not sure but i cant wait to see her eyes when the deal goes through and later i call her to meet and present a check to help her out since her siblings seem to only want the cash and not the responsibility of showing, upkeep, and repairs so it may be wrong but thats the plan.
Thanks for the reply and im going for it!
Shawn
You need to find out the repairs so you can estimate the cost. once you do that you can come up with a bid by deducting the costs of repairs and your fee. I would say if ARV is 70k at the low I would take 40% off from that ,then deduct repairs and your fee from that and there is your bid. You want to have a great deal for your end buyer so you can sell it fast. If they say no ,let them know they can contact you if they change their mind, and then go find another deal. never get emotionally attached.
jmo
good luck
Richie.
You can tell the prospective buyer that there are back taxes that he will have to pay. That would take that financial expense of of her.
I know and the owner and i talked for a bit and she is having to split the asking with her other siblings and out of her part having to pay the back taxes, electric, and gas so creatively i think the offer is ok normally i agree lower but she cried on me and everything really made me think of those magic buttons dean talks about so my thinking is this. I get the property locked up for thirty then pass it on and at the end ill end up cutting her a check to help with taxes and so forth because i want to give back. I know deep down that aint normal but something about this owner really struck me to help all in while making a nice profit. Not sure but i cant wait to see her eyes when the deal goes through and later i call her to meet and present a check to help her out since her siblings seem to only want the cash and not the responsibility of showing, upkeep, and repairs so it may be wrong but thats the plan.
Thanks for the reply and im going for it!
Shawn
"THE ARCHITECT OF YOUR DESTINY IS YOURSELF"
"SUCCESS WALKS HAND IN HAND WITH FAILURE"
I agree with Sandra, Sissy and Richie. First off if I am following this right, you want to wholesale the prop. To a wholesaler that is not deal not at that price. Wholesalers want rock bottom price to move it fast. I am thinking anywhere from 10-15k max and if you pick up a 2500 or 5000 fee, take it and run. If you go the flip route, you really have to do your homework and crunch the numbers to make it work. How is the neighborhood. Is it on it's way back up with owners fixing their houses or is it in decay. If it is the later, forget the flip unless you have a buyer waiting. A lot to digest I know, but just trying to help you make a great deal for yourself.....Jan
Also you could try lease option or subject to. Unless they want all the money up fron then this would not work, but it would be worth it to ask.
Damion Davidson
I will never give up on anything I do!!!
If it's 36, and still needs that work done with it especially replacing the copper pipes, then I'd say offer 26 or 27K at most and list your reasons why. I'm sure they'd be glad to get it off their hands and that leaves you another 9+ grand to do the repairs with and get it ready to go.
John 14:6
You need to know what they owe in back taxes & your repair costs. Also need to know what other investors are paying in your area. What factor 50%-70%.
Lets assume they need to buy under 70% of the ARV minus repairs.
As a wholesaler, you'll need to assume your buyer will want to rehab this property to a pristine condition. So you need to add in those costs.
Repair estimate:
2 New Bath rooms 4k
paint inside & out 5k
2 dumpsters $800
new elctrical box $850
Windows $250 each. Lets say 8 windows= 2k
new pipes 4k
Rounded up =17k x.20 for all extra costs ie:yard work,light fixtures,etc.= $3400
17k+$3400= atleast 24k in rehab + back taxes??
There's plenty more I add in, but lets look from here.
ARV 70k x .65%= $45,500 minus repairs 24k= maximum allowable offer $21,500
Starting offer $18k depending on the back taxes.
Hope this helps for the vision of where your numbers need be at.
Jason S.
San Diego, CA.
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My son is going to do our fix up and repair work. He has worked for a contractor and he has remodeled several homes for different family members and has helped a friend build his new home. Does he need to get his contractors License?
Sorry...I asked a question about another topic...please discount my question as I will post it elsewhere...Sorry
I am, and always will be, both a student and a teacher. My mission is to earn in order to help people find homes they can afford to both maintain and enjoy.
If you haven't done so already, I would have your title company run a check on outstanding liens. If there are any, that is also going to figure into your calculations.
I agree with Sandra on starting out with an offer of $15K. If even contractors are walking away from this place, it could be that this is the best they can expect. Do you have any idea how much the back taxes are? Make sure there isn't already a tax lien against the property because if there is, that lien holder has first dibs on the house.
I know the woman's tears got to you, but you have to remember this is a business. I think it is wonderful you want her to have some walking away money, but you need to figure out how much upside there is in this deal for you. And with 3 parties that need to sign off on the deal, things can get sticky. If the sister gets an extra payout, chances are the other 2 will be expecting the same thing.
Run the comps, go through your repair/replace checklist, research the liens, and then figure out what you should offer. If anything. Even if you get it for $15K but it needs $60K in work, you will be losing on this deal.
Cindy
Life isn’t about waiting for the storm to pass…
It’s about learning to dance in the rain.
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Look under topics - Property Rehab: Fixer upper and Construction Talk,I put 2 software programs that you can download for free to your computer. First one is an Investment Deal Analyzer,it will show you how much you will make on the deal with repairs,holding costs, and the other is Real Estate Offer Calculator.Try these out,I think they will show you what you will make on the deal,to tell you if its a good deal or not.
whurndon
H&H PROPERTY SOLUTIONS LLC