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John Bongers
  • Bellbrook, OH
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Analysis Help: Good deal or Bad Deal

John Bongers
  • Bellbrook, OH
Posted Jul 20 2022, 19:58

Hello,

  I'm new to real estate investing, but I'm not afraid to work hard to find deal. I've come across a potential deal and would really appreciated some advice from experienced investors. So here it comes.

  I've found a property in the Dayton area that is going for auction through the local Sheriff's office. I've been by the place and it's in a good neighborhood and the exterior of the property is in good shape and should cash flow decently well.  The major down side is I'm not sure if I can get inside to check it out. I have seen some pictures online of the inside, and it looks like its in decent shape and I'm handy enough that I can take care of most interior issues.

 Here's  what I'm thinking. The beginning bid will be 2/3 of the appraisal price around $115,00 for an appraisal price of about $175,00. The actual value of the house is estimated to be at $200,000. I'm thinking of  trying to scoop us the property for under $120,000 using hard money to complete the auction. Then I'd like to refinance and take out 70% of the equity (approx. $140,000) to repay my hard money lender within 3 months.

Does this sound like a decent deal, or am I off my rocker? Any help would be greatly appreciated.

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Chris Seveney
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#2 All Forums Contributor
  • Investor
  • Virginia
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Chris Seveney
Pro Member
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  • Investor
  • Virginia
Replied Jul 20 2022, 20:41

@John Bongers

1. You will not get interior access (legally)

2. If it’s worth $200k it will probably get bid up - we have see. Pricing being pretty aggressive

3. Confirm with lenders as most want 6 months before you can refinance

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Juan V Lopez
  • Investor
  • Las Vegas, NV
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Juan V Lopez
  • Investor
  • Las Vegas, NV
Replied Jul 20 2022, 20:48
Great job on finding the deal John, keep hunting. From the numbers you mentioned, the deal sounds fantastic. Anytime you can buy into something at 60% of the as-is ARV, you're in a good spot.

• $120K purchase / $200K value

Honestly, if your as-is value is accurate, you should be jumping all over this deal. And if you can't close it yourself, wholesale it and make a fee for your hard work. Great job, man.
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John Bongers
  • Bellbrook, OH
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John Bongers
  • Bellbrook, OH
Replied Jul 22 2022, 16:38

@Chris Seveney

Thanks for taking the time to reply. I was thinking of talking to neighbors and asking them about the property to see if I could get any additional info. As for the price, the initial bidding begins at $116,000 and I don't think the deal makes sense if the bidding goes over $125,000-$130,000. In that case I don't think it's a good deal, so I would pass. Thanks for the info about lenders. I'm just doing my research on that end, and this really help out for planning. 

  If things line up, does this sound like a good deal?

Thanks

JOhn

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John Bongers
  • Bellbrook, OH
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John Bongers
  • Bellbrook, OH
Replied Jul 22 2022, 16:41

@Juan V Lopez

  Thanks for the reply. I think it looks like a good deal, but am still in the process of doing my research on the property, the owners, the hard money lending and the refinance process. Hopefully things line up and I can dip my feet into the world of real estate investing.

John