Attorney Said "Make Offer"-- (should I Or Shouldn't I)
I located a vacant house and contacted the attorney. Attorney didn't give an asking price, he said just make an offer.
Asking prices for the area average $80K.
I want to wholesale this property? Do these numbers work (trying to understand the numbers).
FMV after ARV = $109K (comps from past 6 mos.)
Using .65 = $70,850
Minus -15K repairs= $55,850
Minus - $10K my fee = $45,850
Offer attorney $45,850
Sell to my buyer for $55,850.
I think this is a good deal, but I'm not certain.
Thanks
[addsig]
What about other expenses? i.e. holding costs.
A lot would depend on how long the property has been vacant, whether or not it has depreciated in value because of its condition, and how motivated the seller is. Why does an attorney have the property? Is the owner deceased or incapacitated? Answers to these might make your offer sound sweet to the attorney. Throw an offer out there, see what happens. All things are negotiable. Good luck!
Thanks!
The owner is deceased and the property has been vacant 3 years.
Because I would be wholesaling, I figured there was sufficient monies available built into the formula for additional expenses (is this okay to do)?
I saw the house, it does require work but nothing major major.[ Edited by tobehappyin2000 on Date 11/18/2003 ]
You might want to itemize those holding cost on a monthly basis. That way your buyer can visualize how much money he may need to pay out to cover the costs. It would also be helpful to know how quickly properties sell in the area and then calculate the average time by the monthly expenditures. If your buyer sees that properties sell quickly in that area, then he will see the probability of his realizing more profit.
Question,
When you located the vacant property, how did you find out there was an attorney? Was that listed in the records or recorded?
Thanks,
Christian "The Solutions Kid" Beebe
[addsig]
Work your numbers backgrounds. Determine what you can sell it for and then deduct sales commission (even if you sell it yourself you need to factor it in just in case u use a realtor), finance costs (points, etc), carrying costs, insurance, repairs, and expected profit. The number at the end of this will be your maximum purchase price. If you can get it for this amount or better pat yourself on the back.
Thank everyone.
I approached the next door neighbor for info about the property and she gave me the contact info for the attorney and the other neighbor gave me a tour of his house.
What would be the best way to calculate all those costs and how should I determine them?
I really need a better understanding.
Hey tobe,
He said make an offer: Than offer him 25-30k. He's an attorney most likely holding the estate not a realtor. Next he may come back with a higher figure so at that range you still got enough room. At 45k you have little room to negotiate.
Do the numbers offer the 25-30k and if he says your crazy then break it down for him numbers style and show him why it is only worth that. He is a lawyer and he is following a golden rule that you never say the number first. I love when people live by that rule because I'll name the number way below what your thinking. Use it to your advantage not your disadvantage..best of luck
Just another quick note...the house has been abandoned or vacant for 3 years. Research the title and back taxes to make sure you are buying a good title. Also look inside the home do not go off the neighbors house.
[ Edited by agm on Date 11/19/2003 ]
the numbers look good, i say go for it!!