Fort Worth, TX · Member since 2015 · 26 posts · 1 vote
I have a house lined up that I want to make an offer on. The owner has dropped his price to $93000 other houses in the neighborhood are selling for $109 to $140 it's a 3 bed 2 bath with a double garage. The work it needs is cosmetic mostly. Im going to offer $85 it's in a very desirable area. It would be my first deal so I need a lot of help. Can someone help me.
Elizabeth
Fort Worth, TX · Member since 2015 · 26 posts · 1 vote
11y
It doesn't need any major repairs. It's all cosmetic. New paint , new floors, the bathrooms need new tile, new floors, new cabinets. It needs a new patio. There are foundation problems but the seller is going to fix it before closing. It's in a very desirable area. I figured $20,000 for the rehab. I'm offering $85 if I can get it for '$85 that take me to $105 I could ask $130 in that area. Does that help?
Fort Worth, TX · Member since 2015 · 26 posts · 1 vote
11y
I'm not starting out from zero I do have experience in real estate as a realtor. So I do have that going for me I am familiar with real estate. I was a realtor for 5 years. Of course I know this is totally different but I'm determined I'm going to do this and be successful.
Specialist · Harrison Township, MI · Member since 2015 · 54 posts · 23 votes
11y
even taking into account that you can list the house yourself, you're about $8-10k high on your offer by my benchmarks.
What kind of financing are you going to use, and how much will that cost you? Also, not saying that your repair number is good or bad, but curious how you came to that number?
Fort Worth, TX · Member since 2015 · 26 posts · 1 vote
11y
I went online and found a rehab calculator and entered the things that need to be done. Oh I'm not a realtor now I would have a realtor sell it. Do you think I should offer less? The guy owns it outright and he's really anxious to sell. I don't think he's had other offers. The place has a really strong smell of cigarette smoke. It hits you in the face as soon as you walk in the door. I plan on getting private funding.
Specialist · Harrison Township, MI · Member since 2015 · 54 posts · 23 votes
11y
Based on your ARV and repair estimate, I would be offering $70-72k. After all expenses, id plan on being into the house for no more than $95k. Based on the details of your transaction, you might be able to go higher if necessary, but don't end up doing this deal to enrich your contractor and Uncle Sam without keeping enough for yourself!
I think we should discuss financing in greater detail. When you say "private funding" are you talking hard money lender? Do you have any info about rates, down payment, upfront points, etc?
Fort Worth, TX · Member since 2015 · 26 posts · 1 vote
11y
I'm talking any kind of funding I can get. I can't go conventional my credit isn't that great. My FICO is 580 so I need hard money or whatever other private funding is out there. You know ya'll talk about not sitting on the sidelines and taking action to start investing well that's what I'm trying to do. I know I can succeed with guidance and some mentoring. See I'm not familiar with the funding part .
Specialist · Harrison Township, MI · Member since 2015 · 54 posts · 23 votes
11y
It's time to get familiar! My suggestion is to find funding now. You are setting yourself up to fail if you don't have a solid funding path before making an offer.
Gather a list of hard money lenders who lend in your state. Call them and find out what kind of terms you can get.
Next question, who will be doing the repairs on your property?
You know ya'll talk about not sitting on the sidelines and taking action to start investing well that's what I'm trying to do. I know I can succeed with guidance and some mentoring.
Getting a plan together is taking action. When you look at somebody who successfully just "jumped off the sidelines and took action", that moment happened long before they wrote an offer. I believe that you can succeed too, but you have to have a plan!
Working real estate deals is like floating an iceberg - 90% of the work is done below the surface, and that's the part that keeps the peak from going underwater.
Rental Property Investor · Shakopee, MN · Member since 2015 · 985 posts · 374 votes
11y
With your credit score you will be paying very high interest for a hard money loan. Also they will want to know all the details about the house before you get approved.
Using an online calculator isn't always the best route. I would get a written estimate from a contractor to show to the hard money lender. Remember you have to sell them to fund you. No different then going to the bank. Also they may not fund the whole thing. They may fund the house purchase but you have to get money for repairs elsewhere. Just another thing to think about. Every lendor is a little different though. Do find out by calling a bunch in your area.
I highly suggest you listen to this podcast on hard money lending.
so do you think I shouldn't do investing right now?
I don't think anyone is saying that. Meeting with the contractor is a good idea. Aside from that, your primary objective should be determining how much money you have to work with and from where it is coming. Bottom line: if you don't have funding you don't have a deal.