FSBO Do or Don't Do, Deal or No Deal

FSBO Do or Don't Do, Deal or No Deal

Savannah, GA · Member since 2016 · 86 posts · 11 votes

BP, in driving around yesterday, I found an FSBO property. In contacting the owners, I've learned they're wanting to sell as they've retired and moving out-of-state. It's a 4BR, 1 1/2B, LR, Eat-in kitchen, converted garage house. They have done lots of work on the house (new doors inside, new carpeting, freshly painted, bathroom has had some updating). They'll be back the end of this week and I will get to see the inside and speak to them. I asked how much do they need to sell it for and they told me 130k. It doesn't have any liens, second mortgage or anything on it, but it does have a mortgage they said. It is less than 130k however, they did not tell me how much. I intend to find that out when I see them upon their return. If they don't get a sale when they come during the week, said they are going to list with an agent. I would like your feedback in if you think this is a deal and should I pursue for wholesaling? Thanks for your advice.

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  • Lender · Playa del Carmen, México · Member since 2014 · 2k+ posts · 1k+ votes
    10y

    Hi @Marilyn Mike! In order to determine whether this is a deal, you'll need to provide a few more bits of information:

    1. What have comparable homes sold for in the area?
    2. What is the repair cost to bring this house up to the standard of those comparable homes?
    3. What's the monthly mortgage payment?
    4. If your plan is to sell for cashflow, what is the fair market rent for comparable homes in the area.

     With that, you'll have everything you need to know whether this is a deal worth pursuing.

    Let us know!

  • Savannah, GA · Member since 2016 · 86 posts · 11 votes
    10y
  • Savannah, GA · Member since 2016 · 86 posts · 11 votes
    10y

    @Mitch Messer The house is livable, move-ready. The owners will be back at end of this week for a week to do some minor, touch-up work inside and to hopefully get sold. I will see the inside then as I've seen outside already. I'm researching to find out fair market rent in the area and comparables (looked on Truila to get). I plan on asking them what the monthly mortgage. I'm going to wholesale as right now I don't have any desire to rent, buy hold. Do you know of another site can use to do comparables? Would like to do two on different sites. Thx for help. 

  • Savannah, GA · Member since 2016 · 86 posts · 11 votes
    10y

    @Mitch Messer meant move-in ready😊

  • Lender · Playa del Carmen, México · Member since 2014 · 2k+ posts · 1k+ votes
    10y

    @Marilyn Mike For comparables, Trulia or Zillow are OK, but the gold standard is MLS data. If you know a friendly agent, ask them to pull recent sales data for the neighborhood.

    Most sellers, when then say "move-in ready," mean the home is clean and nothing is broken. That's what I call "rental-ready," meaning a tenant would happily live there. If your plan is to sell to a landlord, that should be sufficient. However, the comparable homes you find will likely have been held to a higher standard: "retail-ready." This means not only is the home clean and undamaged, but also the home has been fully updated to modern standards. The kitchens and bathrooms have modern fixtures, appliances and decor. The systems (electrical, plumbing, HVAC) are compliant with the latest construction codes. Retail buyers are a very picky bunch!

    If the sellers have owned this home for more than 10 years, they probably aren't making it retail-ready. Instead, they're making it look like it did when they bought it. But that's not where the market is today. So, just be careful about using those recent comps to set current value.

  • Savannah, GA · Member since 2016 · 86 posts · 11 votes
    10y

    @Mitch Messer that makes a lot of sense...it sheds light on what I hadn't considered being fairly new @ this. Will have realtor to give me comparables. I have a few realtor acquaintances. Thanks for taking time to share your knowledge with me. Have a great day!!

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