I need help with an my first deal

9 Replies

So recently I have come across a property in Saint Louis mo. The property was appraised at 187k as is. I do not know how to do the arv but the appraiser that i have gotten to know well recently told me that I could do a light rehab and put in new carpet and sell it for close to 200k. I have got the people to agree to 128k for the house, but I just lost my job so i cant get traditional financing now. I need help with what I should do with this. I would love to rehab it if i could. I have a wealth of info on contracting as i have been a contractor for 15 years. Does anyone have any ideas of what the best way to do this deal would be?

Ben

Bring in a partner who can get traditional financing.

I agree, find a partner.  Not only for financing but their knowledge base and experience may come in handy on our first deal.  If the numbers are true,  you shouldn't have a hard time finding a partner.  I'd be willing to look at the details if you wanted a second opinion.

Hi Ben. I'm in the Kansas area. Maybe we can talk through email. I'm looking to expand my business in this area. [email protected]

Where can I get a contract that I can sign with the person so that I have the deal under wraps so that i can start talking to some people about the specifics of the deal? Or how should I proceed to get them so they can only deal with me. I just dont want to tell someone about the deal and them try to take it out from under me.

Originally posted by @Ben Gibson:

So recently I have come across a property in Saint Louis mo. The property was appraised at 187k as is. I do not know how to do the arv but the appraiser that i have gotten to know well recently told me that I could do a light rehab and put in new carpet and sell it for close to 200k. I have got the people to agree to 128k for the house, but I just lost my job so i cant get traditional financing now. I need help with what I should do with this. I would love to rehab it if i could. I have a wealth of info on contracting as i have been a contractor for 15 years. Does anyone have any ideas of what the best way to do this deal would be?

Ben

 Hi Ben,

Just a word of caution. The best way to confirm what the property would be worth after a rehab is to see what the most recent and closes comparable sales are.

I don't trust anything or anyone unless I see some comps within close proximity.

Just my opinion.

Thanks for reading and have a great day.

Originally posted by @Engelo Rumora:
Originally posted by @Ben Gibson:

So recently I have come across a property in Saint Louis mo. The property was appraised at 187k as is. I do not know how to do the arv but the appraiser that i have gotten to know well recently told me that I could do a light rehab and put in new carpet and sell it for close to 200k. I have got the people to agree to 128k for the house, but I just lost my job so i cant get traditional financing now. I need help with what I should do with this. I would love to rehab it if i could. I have a wealth of info on contracting as i have been a contractor for 15 years. Does anyone have any ideas of what the best way to do this deal would be?

Ben

 Hi Ben,

Just a word of caution. The best way to confirm what the property would be worth after a rehab is to see what the most recent and closes comparable sales are.

I don't trust anything or anyone unless I see some comps within close proximity.

Just my opinion.

Thanks for reading and have a great day.

So i ran the comps. The thing is that everything in the area is 300 sq ft smaller becaus this house has an addition of an extra bedroom bathroom and dining room.all of the ones i found within 2 miles  in the last 6 months hadno updates, linoleum, particle board counters. old bathrooms and they were comping out at about 174 to @1050 sq ft up to 189 @ 1120. the home i have has an addition but it was done with brick to match the original home and it was done well so the house is about 1400 sqft. so i feel like a 187 valuation is a very conservative.

In certain areas in and around St. Louis, adjoining blocks can be entirely different worlds.  Make sure that the comps you found are in fact comparable if you are comparing from 2 miles away as there could be a big difference.  Make sure you know your target market too.  If people are paying $170k-$190k for no updates, linoleum etc, make sure your upgrades are worthwhile.  The market may not reward you for putting in granite counters or extensive updating if the neighborhood won't support it.

Ben, congratulations on finding this one. Here are your next steps:

  • Sign a standard MO Special Sale Contract with the seller (important: make sure to include the inspection addendum). Get 30 days to inspect and a financing contingency if you can.
  • Find an equity partner. Depending on the specifics I may be interested, please contact me by email or phone (below) in that case.
  • Figure out what to do to the property (preferably with the help of the realtor who is going to sell it for you afterwards) and your budget.
  • If it's still a deal after you have your construction bids, proceed. If not, back out based on the inspection addendum.

It may seem daunting but it's really pretty straightforward. I go through it in St. Louis about 2-3 times each month, and I don't even live there. Call me if you'd like to talk it over.

Good luck!

If you cant get the financing or partner for this property. Put it under contract anyway and wholesale it to and end investor. You can make 3k to 7k fast cash.

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