Million Dollar Flip?

4 Replies

I just found out about a deal on a million dollar house in my neighborhood, owner wants/needs to sell ASAP, this is coming from a real estate agent that lives here down the street. The owner of the house asked him what it would take to sell his home in 30 days or less. Agent told him $1,100,000. The owner told him to make it $1,050,000 and try to sell it without listing it. According to the recent comps in the neighborhood, this house should sell for $1.3 - $1.4 mill now. House is only 5 years old.

I just asked a friend to partner with me to buy and put right back on the market at $1,395,000. It is in near perfect condition and doesn't need a single thing done to get it ready to sell. He has already had 2 offers this week from neighbors but contingent on the sale of their home...he said no, $1,050,000 is the deal take it or leave it.

How would you handle a deal like this with a close friend? 

Originally posted by @Skip Gilliam :

I just found out about a deal on a million dollar house in my neighborhood, owner wants/needs to sell ASAP, this is coming from a real estate agent that lives here down the street. The owner of the house asked him what it would take to sell his home in 30 days or less. Agent told him $1,100,000. The owner told him to make it $1,050,000 and try to sell it without listing it. According to the recent comps in the neighborhood, this house should sell for $1.3 - $1.4 mill now. House is only 5 years old.

I just asked a friend to partner with me to buy and put right back on the market at $1,395,000. It is in near perfect condition and doesn't need a single thing done to get it ready to sell. He has already had 2 offers this week from neighbors but contingent on the sale of their home...he said no, $1,050,000 is the deal take it or leave it.

How would you handle a deal like this with a close friend? 

 I'd find out why he needs to sell, take care of the need and take the house Subject To or Lease Option with the understanding that I would be turning around and selling it for whatever I can get. All in writing of course, with proper title report, escrow and disclosures.

Homes in that price range generally dont sell fast . If it looks good offer $900,000 with a fast closing and see what sticks .  it will take you a while to sell it 

What comps did the listing agent use? Why did she come up to $1.1M where you say it should be $1.3-$1.4M. Just trying to understand the disparity here. Also, luxury homes stay on the market longer than mid-level residences do. Are you prepared to pay holding costs? The higher the price, the longer it sits on the market. If the seller is having trouble finding a buyer at $1,050,000, I'd think very carefully about trying to sell it for a considerably higher price. Don't fool yourself into thinking this will be a quick sale. Greed can sometimes blind us.

Form an LLC together, split your "buy in" and all costs 50:50, put it on the market after you own it and sell. Pay all the bills and split the profit 50:50. That area looks like $1.3-1.4mil homes would be the average, very expensive area (at quick glance). If houses are selling for those prices you could make out wel!