I hope I posted this in the correct forum. First Post WOOHOO.
While venturing through an estate sale five doors down from where a family member of mine lives, I discovered that the old lady wants to sell her house. Her and her husband are moving into an assisted living facility as they are both over 80. We are meeting tomorrow to do a walk-through. The house is in pretty rough shape as it hasn't been maintained well over the past few years. When I initially met her she said she was willing to sell it for 140 and put in a new furnace before the sale. No agents on either side. I think this is a steal as two houses across the street just sold for 220 and 230). The plan is to flip by spring.
As I am only 21, what suggestions do you have as I negotiate with her for the worth of her house?
My plan is to offer her 125 and just take it as is. It has a dumpster worth of garbage inside. She is very worried as they have a "new refrigerator and dining room set which she thinks is worth $$ but actually isn't. If she doesn't accept then I will say since there is a new fridge and dining room set that we can do 127. Good plan?
Any suggestions greatly appreciated!!
I would start even lower. Maybe $100k. ($115k or $120k or even $125k sound much better if you have to come back up after starting at $100k), Make good conversation as you walk through and then be really surprised when you see a few things that are going to cost you extra money. I would get them thinking about the benefits of working with me a cash buyer and how fast I would close with very little effort on their parts. I show them my financial statement right away so they know I'm serious and not going to waste their time.
That said, how do you plan to pay for the house and holding/rehab costs? It may be difficult to finance, as is. Cash or hard money should be ok. The money is made on the purchase side of the deal, so learning to buy right is paramount.
Great plan! Before you jump in head first though, did you have an estimate of repair cost? Also, how long will it takes to rehab, holding cost, closing cost, ect? These cost will add up to what seems to be a good deal at first but no longer a deal once you run the number. Most importantly what is your exit strategy, and are these numbers (comps, rehab cost, ect) reliable? Get the property under contract ASAP with very little or no earnest money if you can. I highly recommend you speak to an agent and ask to run comps in the neighborhood for you if you haven't already done so. Get a few contractors to give you a bid once you have it under contract. Don't forget to update your status and let's us know how things are going for you. Good luck
Did you do a title search to see how many lien is on the property and be careful with older people and doesn't take advantage of them?
You might want to take a contractor with you on the walk-through so you have somebody that would be able to give you an idea of the work, time-frame, and cost that will be involved in the rehab before you're committed.