First Deal - How does it look?

[Daniel Dietz]

Hello,

I have an opportunity to actually gets started instead of just thinking and planning!

A Professional Flipper who I am friends with that does maybe 6 or so houses a year has one that he is willing to work with me on as he already has 4 going at once, and has been looking to do a 'quick flip' for a while. I had already been looking at this place when he made the offer.

It is currently a 3/2, GREAT location backed up to a wetland/preserve in a very desirable area for its price range. It is assessed at 130K without a finished basement, in a neighborhood that ranges mostly 140K-175K with finished basements. He go it for 75K when they were asking 80K. He has a budget put together if I am not interested in doing it of about 20K to fix it up - roof, flooring, paint, drywall, and some pretties like shutters, a touch of brick, etc... This would also turn it into a 4/2 which is very desired in that area - lots of families with kids.

He is willing to sell it to me for 85K on a land contract at 5% for 6 months, and 8% for the next 6 months if needed. Interest only payments paid quarterly. I would need to fund the 20K of improvements.

I had been thinking of keeping it for a rental, but am also considering flipping it if the numbers work. If I kept it, I could get a permanent note for about 110K @ around 5% at 30 years. Payments and taxes and insurance would be about $850 month, and it would bring around $1100-$1300 in rent. He feels it would sell in a matter of weeks or months at 140K or so.

I am mostly looking at real-estate as a supplement to retirement income in15-20 years, but some current income would not be frowned on either ;).

So , what do you all think?

Thanks, Dan