I may have my first deal, not sure how to proceed.

2 Replies | Mobile (Alabama), Alabama

I went to look at a property today. It is a property the seller had bought to fix and flip themselves, however, the husband has recently died. I would estimate that the renovation is 70-80% complete. Current comps would put the ARV at 125000, the seller is asking 80,000 but said she would negotiate. I have not tried to negotiate, mainly because I'm not confident in valuing the ARV or estimating repair cost. The large ticket items that would need to be taken care of are a new outside hvac unit and a pool that either needs to be filled or repaired. I have contacted a couple of contractors to give me an estimate but havent heard back from them, and I want to go ahead and lock the deal up asap. Any advice would be greatly appreciated.

Hello Deangelo !  There are several things I would recommend.  See if she would do owner financing to your terms, like any down payment, the length of time that it will exist, and the time you need to close.  if all is what you want, I would hire an experienced home inspector before closing and possibly find any problems that are new to you and keep shopping around for cost estimates or bids for the subject work.  Before closing let the seller know of anything you did not count on doing the repairs/rehab.  I would also check the demand of renting and selling in that area and see if that fulfills your plan or goals. 

Put in your contract to purchase contract has the ability to offer a change of price and just to walk away without a penalty.  Tell her that the Owner Financing will help her on the price, and that she would also save on the typical closing price, including the Agent commission.  Is it in a growth area regarding population and jobs.  You might call the city's home inspector and find out if they have any problems with the subject property and anything they look for in particular.  Do the typical evaluation and see if will it fulfill the typical pros and cons.  Just do what is average in that area.  Good luck to you!

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