Is This A Profitable Deal?
I'm interested in a house in Frederick, MD that is currently divided into two apartments. It is listed at $425,000. Even at market rents, the property would have negative cash flow. I have considered converting it back into a single family home and finishing the attic. The property is listed with a realtor, so I don't expect the sellers to discount the price, even though it seems to be twice as high as the most expensive comp I could find, the property is vacant, and it's been listed since May of this year. How can I find out if this would be profitable?
Hi DAFord,
Based on the information that you provided, it may be in your best interest to walk away. If the property is priced twice as high as every comp that you found, even if there was a discount by the owner, it still wouldn't make you any money!
Unless you are a Big-Player, I would stay clear of the high dollar homes until you feel strong and confident about what you are getting in to.
Best of Success!
BAMZ
I agree if its at a negative cash flow then what would be the sense of buying it. You might try making it a duplex and selling the duplex, or make a third apartment to make the cash flow work, but your offering should be a lot lower. I would make a low offer and see what comes of it. If it has been for sale since may they may take it. Start at 300K and see what they say.
Good Luck,
Kyle
I think you know the answer to your question.
1. Unmotivated seller
2. Real estate Agent (who is either doing what the seller has asked them to do OR is a greedy fool.)
3. Price ( theres a fool born every second)
I would bet you do not need to be told what to do with this one.
From the looks of it, the seller put it on the market for the sake of "If someone is willing to pay me this price, then I'll sell it, otherwise I'll keep it now and forever.” I know allot of people who own property and will tell people they are selling the property, only to tell them the price and get sticker shock.
Respectfully,
Phil
Phillip Herrejon
President of the Chicago Real Estate Investment Club
[ Edited by Pherrejon on Date 10/29/2003 ]
priced twice as high as comps?? why are you even bothering with it ... move onto something else..