Newbie Flipping Question
Hi All,
Im a newbie. I was hoping to get some advice from the REI gurus in this forum. I recently bought a SFH for 410k appraised at 485k. Its been 3 months and i've decided to put the property on sale. Now here are some of the questions I have.
1) a realtor approached me asking to list the property with him. He found out that i bought it for 410k(thru tax records).Now he says if you bought it for 410, u cannot sell it for more than that. is this true?
2) I thought the whole concept of REI is buy low and sell at market price which is exactly what im trying to do. Now if i put the property on the market for its appraised value, would the buyer or his/her realtor find out how much i bought it for? if yes..how would i ever get my property sold at the fair price?
Sorry for the long message.
Any advice/suggestion on how to deal with this is greatly appreciated.
Thanks,
mvm
To answer your questions
1) Cannot is not the right word, probably wont is much better.
2) Yes, the buyer and his realtor can find out what you paid for it exactly the same way the realtor that approached you can. That is exactly why I say that it would be pretty difficult to sell it for much more than you bought it for. Your purchase price being only 3 months away will figure heavily in the sales price unless you have done something to increase the value, in my opinion.
Ryan
Make a list of repairs you did to the house. Make it known to people that you fixed the place up. Even if you didn't do much work (or any) make it seem like you did greatly increase the value of the home!
The average homebuyer is an idiot and they all go by the assessed values and previous purchase prices only. I get the info too but that is just once piece of the puzzle. They take it as the most important piece of information!
You might consider getting an apprasial done on the property to show to perspective homebuyers the actual value. It is even better if you can price it under that value!
GOOD LUCK
Giving this guy the benefit of the doubt, maybe he means you can't sell it for more without incurring serious capital gains, or you can't sell it for more because you won't get any buyers.
Who knows?
But other than that there are no restrictions, no caps on what you can sell your property for.
Heck, maybe this guy's from a Communist nation (Cuba, China) and he hasn't grasped the concept pf Capitalism yet.
Either way, find yourself another realtor.
Good luck.
[addsig]
Ryan,
Thanks for the reply. So are you suggesting Im stuck with this for a while? How can i get this property sold for the FMV. I've done some significant improvements to the property. there was a 1 car garage when i bought it. I rebuilt a 2.5 car garage, installed a fireplace, dishwasher, added extra cabinets to the kitchen, costing me around 30k. Can i add this to my purchase price and make it close to the market price.
Thanks,
mvm