BiggerPockets

Hi, For all investors, I may have a potential deal. I would like to run it pass the forum to see if anyone is intereste. I am looking at a property where the fair market value is $245,000.00 in a nice, quiet section of Philadelphia. The owner's asking price is $190,000.00. My offer is a maximum of $180,000.00. The deal will be approximate 25% below market value. The repairs are very minimum totaling less than $5000.00 and I am looking to do an assignment of contract at 10%. What do you think about this? Are there any cash deal investors out there? :D

Hi Jon, thanks for the analysis on my potential deal. After analyzing this deal based on your reply, I can see how it would be difficult for the investor to make a profit as a fix and flip at 83%, especially if I am asking for 10% of the assignment fee. So, let's say I decrease my assignment fee to 5% of my maximum offer of $180,000.00 with the repair cost still being $5000.00. and my assignment fee being $9k. Can you see an investor making a decent profit from this deal.

Hi Jon, I offered the homeowner $160,000.00 on the property with an ARV of $245,000.00 and he declined my offer. I am willing to negotiate up to $180,000.00. I do not have a buyer's list yet. My plan is to assign the contract and move on to another deal.

I must agree. As well. If you bought it out you would be very hard to rent out. The way the Market is it would be very very hard to sell. Then you're losing money each month with a single home sitting there. If you was going to buy it for yourself it would be a good deal. However the investor is not going to buy him or her something that going to sit there and take a loss until the market gets better. Not to mention for the average Joe it is really hard to get approved for loans right now (Plus the Avg Joe can't afford a home like that). Hence more renters :) If it was me you can take that same amount of money and buy yourself a 4 plex or on up. Keep in mind if it is more than a four plex it is consider commercial and you need 20-25% down. :protest:

If your interested in turning this into a deal offer $125,000 to $135,000 and walk away.

Check back with the seller once a month or unil they sell or tell you to quit calling.

In this market there are a lot of sellers with problems we are not here to take the problem off their back and put it on our back.

there is another possible way for you to make a profit from this deal.

Do an option with the seller for 15 days no out of pocket money from you with a set price sell the home in a week for more than that set price.

This works quite well if the property is truely priced to sell 5% below true market value

of course there is a lot more to this strategy.

Yes you see the light but in this market Realtors are taking up to 6 months to sell.

I can move a property in 2 weeks for 95 to 97 percent of true market value.

So if I contract for 90 percent of a FMV 245,000 that is 220,500 i sell for 95% or FMV = 232,750
- 220,500 = 12,250 profit.

If it costs $1,500 advertising and expenses and you only close half of these deals.
In 10 deals you would have 5 close for total of 125,000 profit - 10 deals cost 1500 = 15,000 = 110 profit............
Did I get the numbers right .......everyone understand.......If you want to learn more just ask

I double checked the numbers and yes they are right.

This is a numbers business. Get the numbers right every time.
I wouldn't suggest new investors try doing things by my numbers. And you must learn to market a property in a couple weeks. It's all about strategies.