Seller wants to sell at 85k house worth 140k fixed up. Got him to go for 83k. It's been vacant for 12 yrs. Not enough spread to flip to a rehabber. So I'm gonna get him to do seller financing. Put it under contract for the 83k. Seller finance for 135k. Then sell the note and keep the spread myself.
How much is repairs?
Look at jv w seller
Vacant for 12 years will probably be a pricey rehab. Busted pipes and mechanicals will be shot. Make sure to get a accurate assessment of the numbers first.
I don't see this as a good deal at all. Here is why: ARV $135,000 (you hope and expect). Using the 70% rule, an investor would not pay more than $94,500 AFTER all repairs are done. If the home has been vacant for 12 years, lets assume at LEAST $15,000 in repairs (VERY conservative). $79,500 is the top dollar you could pay. That is NOT including repairs greater than $15K, and not including any wholesaling finding fees as you mentioned "selling the note and keeping the spread", holding costs, etc....
I just don't see any profit here but TONS of potential for a loss. I would do a VERY detailed ARV inquiry on this home and a VERY detailed repair cost spreadsheet before going further.
Free eBook from BiggerPockets!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
You must be a BiggerPockets member to post on the forums
Join the world's largest, most open Real Estate Investing Community online, 100% free forever!