Fed Back On First Rehabber?
O.K. Today I went by to look at a rehab project. The guy is asking for a firm 195K. Him and his partner says it will need about 20k worth of work. He says ARV is ruffly 260k.
4bed,3bath,2300sq ft two stories and two story garage and a second garage,fire place in the country.
Next door sold in June '03 for 230k one further down the road is on the market for 299k, and yet another is selling for 279k. There very close to similarity besides the greater one has a pool.
I have a friend who's been doing construction for some time is coming over with me today to look at it to estimate it.
Most of the doors need replaced if not all, new carpet probably in the whole house, update the bathrooms (toilets,shower, tile, and sinks probably), cracks in a few places on the siding, the back deck looks like its going to fall its so old, interior painting and a few holes in the walls, he says it can use a new roof. Is burnt marks by the fire place on the walls any sign. Plumbing Paint the exterior and new windows.
Sounds like more than 20k to me. I don't think I should even go back to this one. I was thinking of hard money but there's not enough LTV maybe flip it for around 10k or less to a patient rehabber. I don't know What do you think? Pass on it huh?
All fed back is greatly appreciated. 
The repair quote may be on target.
If it is smoke stains on the wall near mantle, they probably had poor ventilation - didn't open the vent, the chimney needs cleaning, etc
I am looking more at your spread. If you put in $215 K (195 +20), and IF you can sell for $260k as he reports, you have a spread of 17%. Keep in mind it will take time to do repairs, and time to sell. (What is average DOM (days on market) in this area?)
I think you can get a better margin. I think a lot of investors will try to get rehab properties at 60-65% ( or less ), and maybe wholesale at 80-90%.
You know sometimes deep inside you just get the feeling that a deals is not really a deal.
I have already backed out of this one. Thanks for the conformation.
Could you make a lower offer?
It sounds like this house has some problems. Nothing unfixable, but problems. I would knock about 40K off their asking price and make an offer. They will probably reject it, but after a while on the market, they may call you back. Then again, they may take it.
Nothing ventured, nothing gained.
If nothing else, it'll be cheap entertainment. Even cheaper education if they accept.
Remember. Their asking price is their realistic price with dreamability added on. They would love to get full price. It's your job to jolt them back to reality.
"Hi. I'm Earth. Have we met?"
And his ARV? I'd say no way! I would expect maybe 230, especially with interest rates going up. I wouldn't count on more than 210. That's your starting point. (Just guessing from your info and my limited experience.)
I wouldn't throw it out the window. Just be realistic about your offer. If your offer doesn't embarass you, you didn't go low enough. What are they going to do? Beat you up? Throw you in bidding prison? Get over there and kick some low-ball butt!
Ronnie
Yes indeed. Thats just what I need. Hey why not got nothing to lose but I got a whole lot to gain, let me play the game and save some change and a whole lot of heartache and pain.
Thanks again.
My little rap and two minutes of fame
<IMG SRC="images/forum/smilies/icon_cool.gif"> [ Edited by Homemagnet on Date 09/14/2003 ]
Please send me a private message and let me know how it turns out. I'm dying to know.
Ronnie
[addsig]