Good evening everyone!
First post here after signing up, just a brief description of what I am trying to do:
I found a foreclosed home in my neighborhood that I'd like to be my first flip, to get my feet wet. It is currently bank owned...
I went to take a look at it today, the house is in fantastic shape on the outside, but the inside is literally stripped to the studs - nothing in the house at all. Subfloor, studs, electrical, that's it. Someone tried flipping and ran out of money.
The price on the foreclosed property is $239k, I believe the comps are showing roughly $290-300k with the interior put together. I'm getting a contractor to take a look to give me a quote on the build out, but doing my own research I believe it's going to cost about $75-85k to rebuild this home. Obviously, the numbers dont really work out well with the listed price.
My main question is, as a bank owned property, would a number of $180k, all cash be something the bank would even consider? How low should I shoot? How are they coming to this number of $239k when the interior is gutted.
Any general advice would be appreciated!
Also! How will I know what type of finishes to put into this home - as in I don't want to go too high end and not be able to get all the money back - but I dont want to do the build out mediocre so it doesn't stand out from the rest.
Thanks for your time!
Do you have the actual funds to close on this property to fix it up? You might want to check out some listed comparables in the area to see how nice they are renovated as those will be your competition.
Yes we have the funds to purchase the property cash with no contingencies - but may need a construction loan for the renovation.
The problem is there are no accurate comps, as everything else on the market is out of date or not similar to this property. All I can really go by is square footage, quality of materials and eventual end design. What else should I factor in here for a comp?
@Brandon Chase I think you may be looking at this the wrong way. Instead of asking "do you think the bank will except or should I adjust" just run the numbers based on estimated ARV and your quoted rehab cost (plus maybe 10% more on the rehab budget for fudge factor) and determine YOUR max purchase price for the amount of profit you want. THAT number is the asking price. If the bank doesn't except, find another deal. Make sense?
Absolutely, thank you!