First Deal
Need some feedback,
Asking price on house 79k, driveby apprasial at 115-117k. Turnkey from contractor at 23k. does not include any bank fees, dumpster fees etc, i figure 7k for all other. Tenents are in house and need to be evicted. What would be a fair wholesale profit on this. Assume tenants are out.
Thanks in advance for your post
You'll have to get it lower then 79K
Apprisal Value: 115K
Quick formula:
Apprasial vaule multiplied by 70% = 80.5K
Repairs = 30K
80.5K - 30K = 50.5K
50.5K is your maximum allowable offer to the seller if your going to wholesale it.
If you do wholesale it, you have to leave enough equity in it for the person buying it.
If I read your post correctly, you need 30K in repairs right?
slim profits.
Have you calculated the holding costs?
Closing Costs?
Financing Costs? (rate and points).
If you want to get rid of it quicky and minimize holding costs you should sell it at at least 95% FMV.
Not to be a pessimist, but until you do a lot of rehabs, people generally underestimate the repairs by 50% on a small project.
I'd examine it more closely. It would't take much to push you over the top and get you upside down.
Thanks for the replies.
79k for the home and 23 k for turn key rehab from a contractor. I figured 7k in holdings, cl-100, advertising etc, maybe a little over bid on my part.
117k drive by makes buying the home at 68%. My plan was to buy the house at 79k flip it to a rehabber for 85k assuming he would do work his self or sub contract. Is this doable in your experience or is profits to slim. PS, in the coastal SC area
I've studied Ron LeGrand's courses on wholesale/retail. He preaches a min. of 20K profit on every rehab you do. I think the real players won't get involved unless they see something in it for them. You have to figure, their holding cost, rehab bo bo's and every fluff factor's. Don't over pay cause you want to do a deal, get it at the right price and you'll be able sell it a lot easier. The house is the seller's problem, not yours, make them play your game.
Hey,
Is it doable? Sure, just about anything is "doable". You can always find someone naive enough to overpay for a house.
But is it realistic? No.
I am little slow, but here are the numbers I get.
$79k + $30k = $109k
$115k-$109k=$6k profit
And you want to add a $6k assignment fee on top of that.
That means you get all the profit.