What Would You Offer
the home is worth 50k with a large empty home next to it, a vacant home for rent across the street, & other less than stellar homes on the block.
Water damage can be seen in the ceilings, and in the big puddle of water in the living room floor.
Pics link below, just click next to see all 26 of them
http://groups.msn.com/potentialdealshousepics/shoebox.msnw?action=ShowPhoto&PhotoID=2
from looking at pics what would you offer? theyre asking 30k
[ Edited by verbatim on Date 02/21/2004 ][ Edited by verbatim on Date 02/21/2004 ]
This house is scarey. What part of town is it in. If you say that houses in this area like this one are going for 50,000. Calculate how much you'll need to make it liveable and subtract from market. I would not offer more than 20-25K
borderline part of town. one block this way homes are fairly nice. one block that way they are low income not well keep type homes.
I wanted to offerlow and if it got accepted attempt to flip.
thats what i was thinking, buy low and flip.
from the pics in the link above what would you estimate the repairs to be?
15k if you are lucky. I would stay away from this one.
Looks like it could be in Pittsburgh. LOL. I see these a lot.
Go WAY down on your offer. This thing could eat you alive. It could also give you some nice bucks.
I would probably start in the 7K-10K range. That is with what little I know about the place.
At 30k, these sellers are in la la land.
To flip it, a "reasonable" offer, from an investor's point of view, probably wouldn't be in 5 figures. i.e. below 10k.
If you were going to keep it, fix it yourself, and rent it out, you could get away with paying a little more.
If you get this thing try to the the one next door also. It's hard to get someone to buy a house with the one next to it boarded up and trashed.
thanks for the input guys...yeah the boarded up home next door is a total turn off.
Hello Verbatim,
Thanks for the good pics. Truly enjoyed seeing the property.
Just had to chuckle, though, because I had the exact same thought as thomasgsweat -- would make an initial offer of around 7,500! Looks like too many hidden "surprises" with this one. Actual repair cost could skyrocket on you. btw - wasn't there a dumpster in the yard next door? Looked like one in the pics. Maybe someone is rehabbing that one. All the best to you down the road.
greenpropps
Hi verbatim,
Cool pictures. Always more fun to see what projects look like when we're talking about them.
And then - I wouldn't run from this one just yet. Few questions in general:
1) Is anything owed on the property?
2) Will the owner carry?
3) Is the house on the right, (boarded up), under rehab? I saw a dumpster in the backyard?
4) Is the source of the water damage the roof?
5) Are you ready to take on a rehab like this? You'll need access to capital.
6) Will you rehab and sell or hold as rental?
7) What do houses in that 'hood rent for?
Other longer term thoughts regarding the neighborhood - vacant houses could mean motivated sellers. A few rehabs in the same 'hood could *up* the 'hood and prices.
What I would do:
- see if the owner will carry
- contact other prop owners in 'hood and see if they want to sell, maybe carry paper
On this property: Make a low offer, say 15K with owner carry terms, little or no down. You might be able to sell the idea of owner carry in that there would be difficulty obtaining a conventional loan.
Get a quote for the roof, if that is the water leak problem
Get a quote for drywall replacement and painting interior/exterior.
Don't over-rehab for this neighborhood.
What you are looking for is clean and freshly painted with sound structure.
Blah, blah, blah. I talk too much.
Noel
Fireplace! Nice feature. That's a selling point! Seriously though< I've seen quite a few houses like this one where I live. I've seen many in this shape where the asking price for them is 60,000. Around here 30,000 would be considered a deal. It may be do-able if the water damage isn't so extensive that you've got to replace some of the structure. The kitchen cabinets although outdated can be made to look almost new with some paint and new knobs. The glass cabinet doors are nice. The fireplace and bookshelf area also may look nice. The water damage is the biggie. I'd get a structural inspection and estimates. The other concern is the neighborhood. If you update it and the other houses just sit there and deteriorate, it is going to be hard to sell yours. Having the best house in the worst neighborhood is not the way to make money.
If FMV is 50k then you got to be about 10k. There is more damage that meets the eye. Was that water i saw standing in the room? Once you start tearing things apart it will be like pulling a string on a knit sweater.
What about mould? Id pass.
[addsig]
Listen to Wheeler Dealer!
Jeff Adam
[addsig]
You say that the home is worth 50K, what do you think that it would bring after fixup? It looks as though it may have some good potential!!
Why so expensive? Is that house on the beach? They have great beaches in TN (on the calendar wall) and I wonder where did Mike (MikeWood) saw a good potential in this house based on antique door ... and why showing the door which cost $34.00 new instead of showing the good pic of the house exterior? Offer? After I consider my time and the flight to see it, my best offer is $11.00. Take it or leave it!
In my opinion, just by looking at the pictures I would pass on this deal. The seller is dreaming at that asking pirce, not to mention the abandoned property next door. If you really are interested, I would lowball the seller. however, offering the seller less than 1/3 of what he is asking might piss them off and you could blow the whole deal.
[ Edited by raymo28 on Date 02/23/2004 ]
look man if you offered them $10.00 you would be doing them a favor. you are going to have so much work to do in this house it's unbelievable.
trust me most of those wall are gonna have to have the plaster torn off and then resheet them,that whole cieling is gonna have to come down.
i know ur thinking that they're not that bad but the problem is that you just don't know what other damage has happened in those wall with all that water running around there. water is a funny creature and it does some wierd things to houses. if you knew for certain how much it would take to fix it all i would tell you to bid on it with that in mind but there is just no way to tell what kind of damage has been done untill you get in there and rip it apart. is that really how you want to spend the next three to four months?
[addsig]
That house looks nice compared to some of the blower upers I've seen. But it looks like it is in such a shape that you should be able to get it dirt cheep.
Good luck,
James
After careful review, I would buy it for
$10k and wholesale it to the "Rehabinator" for $13k.
I would take the quick $3k profit and go to Hawaii for a week vacation.
P.S.- I have a theory, if I look at it, I offer on it, even if the offer is one dollar. There is a buyer for everything!
Best Riches,
Jeff Adam
_________________
"The only place success comes before work
is in the dictionary."[ Edited by JeffreyAdam on Date 02/23/2004 ]
50k ARV (How firm is this??)
35k max borrow from Hard Money Guy -(50k*.7=35k) (Assuming you don't have cash)
The 35k needs to include the purchase price, closing costs, plus rehab.
You need to get a couple of repair bids from a couple of reputable contractors.
Here in Atlanta, assuming no major structural damage, you'd probably be looking at 20k repairs, making the asking probably around 5k or so. In my humble opinion, this ain't worth it. You'd have a tuff time even getting a rehabber interested in this thing. Perhaps you could get it, tear it down, and build a new house there? You might be able to do something with it then...
Oh, and I've been in MANY of those houses here in Atlanta, and they'll sell for 50k, with an ARV of 120k. UNREALISTICALLY, because you'd never get that for them. Typically, newbies buy them, and expect to rent them out to Section 8 people, and make a killing, which don't happen, and they get stuck.
Good luck...
man, i dont' know how you managed to pick such funny titles for every picture. hahaha. if you're planning on selling it, i think it's a good deal, not a great one but i wouldn't pass on it completely. i price an offer so that i won't cry if i get stuck renting it out b/c i couldn't sell.
that neighborhood has nice looking homes to me, all solid brick structures nice architecture - both homes labelled "across the street" are nice to me. i'd buy them all and try to own that block! that's a lot of home for 50k. wow.
for the quick fix, i'd have to (as someone else said earlier) piss the owner off and offer them 5-10k and not go over 20k. if they took the 10k or less i'd do a nice rehab - if they took the 20k, i'd go in there with as many sheets of drywall as my pickup could hold (25, last i checked) and get busy. drywall, compound, primer, paint and a $20 sander from home depot, do wonders for a place - as far as looks. once the water prob is nailed, this does not look very bad for a rehab. pretty standard from what i see. first thing is make a bigger mess first by ripping out all those walls and starting from the "gutted" stage.
trying not to get long winded ... good luck!
wow the house looks like its in good shape by my standards....