BiggerPockets

Hi Nicole-

Don't know if it's too late to post some other questions but I'd want to know:

-Are there any back taxes owed/unpaid?
-What is owed on the Water Bill (You'll need that final water reading anyway correct?)
-Are there any other liens against the home?

Hope This Helps,
Good Luck!

Patrick K

Thanks, guys. I truly appreciate the wealth of amazing tips. Well, the meeting was a 2.5 hour dialogue. It was quite strange and rewarding, although I hadn't gotten any of the properties under contract. My guess is that the woman is semi-motivated. The one property I checked out today needs between $50K-$60K worth of repairs. The lower end comps I received from my agent are between $10K and $40K. Now, the 1st floor of the property, which was once a store, is pretty much gutted. The 2nd floor is a 2 bed/1 bath apartment. Someone had begun remodeling the place to make it a 2 family unit, hence turning the store part into a residential unit, about a year ago. Unfortunately, the place was left in shambles because the guy who was remodeling passed away. The owner says she needs at least $25K so that she can catch up on bills associated with the other 3 properties and her husband's passing. She told me that the taxes are current on this property I'm discussing. Her other properties include a store and two very huge homes. After her husband died last spring, she said that she's been struggling with finances. There are no mortgages on any of her properties, and she terminated insurance and turned the water off for the property I was interested in.

I know this is a long post. I just wanna include all the details that may be of importance.

Any advice on what my next step should be, or should I market this property, the one that the owner wants $25K for, to see if I can get a buyer to take it off my hands for $30K?

Please let me know if I should move on to the next or try to make this work.

Thanks!

Good morning, Dani. I believe it could be easily sold for at least 70K once the renovations are done. The area where the property is isn't quite a war zone, and there are townhomes being constructed across the street from the property. See, I think it would be an ideal property for a landlord. I think I really should get a general contractor in there to estimate repair costs because what I mentioned in my previous post is my thought on reapir costs. I'm gonna contact some buyers to see if they are willing to take it for $30K. The owner isn't ready to give up her other properties as she lives in one of the homes, wants to fix up and rent out the other home, and still operates the store she owns. She's hoping that someone would be willing to fix up one of her homes, a very seemingly beautiful and large one, without getting paid until she gets a reverse mortgage or loan of some kind. I'm not sure who would be willing to renovate the home she speaks of while waiting to get paid and reimbursed for material costs at the end of the project. Perhaps I should see if any churches in her area would be willing to do so.

Wow, I think most people work the "70% formula" a bit differently - because the idea is to have a reasonable profit margin, and not a paltry margin.

So let's re-work those numbers to actually give the investor a chance to get the "15% expenses and 15% profit".

$70K ARV
70% of ARV = $49K

70% ARV minus repairs = $49K - $50K = OUCH, a negative number and probably a money loser.

You would have to be given this property and at least $1000 for this to fit the "70% formula". No profit to be seen from how I look at it without that type of offer... And those numbers did not even allow for a wholesale fee either.

This one sounds like a NEFF (Not Even For Free) house.

This is not a winner. Why dont you go after the better properties and tell her that if you know of someone interested in the fixer that you will pass their name along.