What would you offer?

Question

2br/2bth duplex in good part of town.
                    
                    potential rent: 1400 a month if both units rented currently one unit is empty.
                    
                    empty units has cat damage and has been gutted out by the owner. Outside the unit is in pristine condition. 
                    
                    50% rule would have me all in for around 100k.
                    2% would have me all in for around 70K  
                    
                    i'm thinking prolly 7-8k in repairs before it is rent ready.

John Chan · Answer

I thought you meant "gutted" as in down to the studs. Carpet and paint is really a regular rehab.

Taking your word that this is in a good part of town, I would offer 70% of the price of comparable properties minus accurate rehab costs.

Steve Babiak · Answer

If "gutted" means to you what it means to me, I think you are under-estimating the repair figure with the numbers you posted.

David Chan · Answer

Isn't 70% of arv used for flipping more then buy and hold?

Anyways I walked through it with a contractor and he said because the subfloor is composite wood and not ply wood. Kilz won't cover up the cat smell. And removing the subfloor and retile  with ceramic tile will cost about 10 psqft. Its 900 sqft down stairs too so around 10k on flooring?

Account Closed · Answer

I have successfully gotten rid of dog and cat urine smells form old hardwood floors.  As a youth one of my first jobs was in maintenance and I had to clean and assist in the remodel converting a dog kennel into a place the company could put their purchasing department offices.  It took quite some time I remember mopping and hand scrubbing the floors with a heavy ammonia solution.  I remember working awhile and stepping outside for awhile.  After several successive treatments the smell was neutralized.

I found this article that might be a quicker solution.

http://www.getridofthings.com/get-rid-of-cat-urine.htm

Douglas Christian · Answer

I'm back and here is my offer.
140k comps
70% 98k
insurance:  $180 mth
taxes:  $68 mth

REPAIRS:  NOTICE IT IS IN ALL CAPS.  BE CAREFUL.

I would estimate my repairs to be about 25k for this unit and for anything that might need to be touched up on the other unit while I am at it.

I would probably offer between $65k and $75k and let them counter me.

Is this a private owner or a bank.  If it is private owner then I would do some sort of owner financing with some money down.

I know you are going to say it is in a good part of town and they are not NEGOTIATING, well how long has the property has been on the market.  HOw long will it take to get the other side repaired and rented.  My calculations about 30-90 days.  See you always add in for unforseens everyone else is going to say NO, but I have been very SUCCESSFUL at the TIME AND CIRCUMSTANCES RULE and this is ALL I do for a LIVING so I must be doing something right.  Let me know how it goes.  Remember you are the one that is going to get stuck with ALL THE UNFORSEENS in the end so make it worth your while if they are not willing then MOVE TO ANOTHER DEAL.

David Chan · Answer

Whats the verdict?

David Chan · Answer

taxes: 2000
Insur: 800

well 10 a sq ft covers removing the subfloor, replacing subflr, and tiling with ceramic tiles. not so bad is it?

Peter Mackercher · Answer

10 psqft that seems high. Also what are the taxis and insurance costs.

David Chan · Answer

Comps are about 140k.

Gutted: he took out the carpet and padding and the walls need to be painted and the smell is horrible. Going to roll by with my contractor to get a more accurate number.

Peter Giardini · Answer

David, what are the comps for similar properties in that area?

What would you offer?

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