Found A Great Deal, Using An Option
I found a distressed house in a white-hot area that needs rehab. The fixed-up value is $150,000.
I believe I can pick it up for $100K.
I plan to do basic cosmetic repairs flip it to another investor for $120K or so.
Should I lock it down with an option agreement, or a purchase agreement with an assignable clause?
Thanks for any insight.
Quote:
On 2004-11-17 19:26, writergig wrote:
I found a distressed house in a white-hot area that needs rehab. The fixed-up value is $150,000.
I believe I can pick it up for $100K.
I plan to do basic cosmetic repairs flip it to another investor for $120K or so.
Should I lock it down with an option agreement, or a purchase agreement with an assignable clause?
Thanks for any insight.
You don't need an option or an assignment of contract if you plan on fixing it up. What you're saying is you're going to buy this property, fix it, and resell it for profit. You need to consider some things, however:
Worth - $150,000 (repaired)
Buy @ $100,000
Sell @ $120,000
Rehab Costs - ????
Closing Costs - ????
Profit - ????
So let's say you fix up the place while under contract. You better pray you find a buyer because the seller, if they are smart, sure is praying you won't!!
What I meant by 'basic cosmetic repairs' is $1000 of minimal labor/supplies, to be done over a weekend.
So let's say that, plus closing costs of $5,000 is $6,000. I'll be happy to filp it for $120K and pocket the $14K.
I don't plan to hold for long. In fact, once the contract is accepted for $100K I plan to do the minimal work immediately and blanket the area with FSBO signs, as well as contact rehabbers in the area.
So this falls more under a wholesale deal...just thought an option might be prudent.
Is this property available now?