First Deal...need Some Suggestions
I got a house for 25K...assessed value is 48K...house needs to be rehabbed, probably about 15K...have a 60 day close...any suggestions on the best way to handle this transaction...newbie here...open to all ideas <IMG SRC="images/forum/smilies/icon_smile.gif"> oh, most important...comps have sold in the low 60's[ Edited by bmeesh on Date 03/11/2004 ]
Hi bmeesh,
Do you have the means to fix it yourself? If so, go for it and collect the bigger pay day. Otherwise, find a rehabber in your area and assign it off to them.
You might want to perform your due dilligence as well to be sure if the deal will work for you. I am new to REI as well, so I really can't give you the specifics, just some general ideas of what you can do.
Good luck to you!!
Chris G
I think I might just assign it for my first time...not really interested in the remodel piece...thanks
I think I might just assign it for my first time...not really interested in the remodel piece...thanks
You can get private financing to fix it up and hold it for a year. If properties in the area are selling in the low 60s right now, then you can sell it in owner financing and sitll pick up several thousand more in a year.
Im not sure that I would take this from a wholesaler. I have done 're-habs' and if I cant make 20 on them, i dont feel its wort the effort, and Im not sure there is 20 left in your deal. To me the numbers are, 25 for the house, 5 for you, 15 to rehab, 5 for holding & closing costs and overages on the rehab. That leaves 12. The way to market it would be as a 'Rent-to-own' at 71(min) find a buyer with credit issues and qualify them for a www.mort.in 2/3 yrs. Take an 'option consideration' of 3500 and rent them at ? (figure a 150/200 profit per month + the PITI) and L/O to the new tenant. If you can do this it changes the #'s alot. 71-25(prop)-15(rehab)-5(holding)= 26. NOW, its a wortwhile deal. Just an idea
Good luck
Joe
Thanks for the advice...I agree...I think assigning the property for a fee is the way to go and keep learning the process!!!
I think I missed something here.
Purchase for 25k
Rehab for 15k
Assessed Value 48k
Where's the cushion for profit? Once you add back hold costs and your assignment fee, the deal looks bad. No profit for the rehabber. I wouldn't buy it with these numbers.
[addsig]
I had the same concern as Bill. What is the ARV on the house, that is the only way to determine if it is a good deal.
Lori
[addsig]
Actually...the ARV is in the 80's to high 90's so it turns out that there is a nice cushion...Thanks for all the help!!!