I'm new. I think I found a pretty good deal?

12 Replies

Good Morning, I was speaking with an owner. The owner is willing to sell the house at this point. The owner said he will warrant the electricity, plumbing, septic/water line, and air conditioning in the contract. The buying price is pretty good from what I can see within the selling prices in the surrounding area. What steps should I take next if any?

Hello.  What are you looking to do with the property, rehab and sell?  Rehab and rent?  Im not a seasoned expert, but not new either - my take is that you should lay out more info of what you are planning to do with the property and exactly how much lower it is than the surrounding area. 

What are the numbers ? What price have you discussed ? What is the after repaired value and what would it take to get the house into condition for after repair value? 

@Christopher Coleman Run all the numbers in the calculator to be safe. Get preapproved. Have Inspections done. Decide if you’d manage it yourself or get a property manager. Start interviewing some if you go that route. Those are a few of the first steps to take. But you want to know 100% that your numbers are going to work. -Mike
@Joseph M. Thank you for your reply. I'm planning to rehab and sell the property. The purchase price is roughly $120K less than the lowest priced property that sold in the area this month. I believe it to be only $35-40K in repairs. The AVR is $230K.

With Zillow, Trulia, Redfin AVM tools why the seller will not asking market price do FSBO, having agent sell it for top price? My question is why he is discounting 48% for you if he can not get the going market?

The warranty is nothing than $250/350 a year.

@Christoper Coleman - Great, does sound like a good deal.  What I am finding, that the most difficult part is the part you said: I believe it to be only $35-40K in repairs.  Knowing what it will really cost to rehab is the toughest part, and there always surprises.  I am currently reading through the FLIP book which I heard about here and has a lot of information, I am currently getting multiple bids on a number of items for my current project while they are doing title search.  Adding another 50% to what think it will cost you to rehab is what I have done - in other words if you still make money at 60k, then your safer.  I get better at predicting the costs each time, and a little better at avoiding surprises. 

There is likely a good reason why it’s half the price of other houses in the area and I doubt that reason is because you found the deal of a lifetime . I’m not saying it’s a no -go ,but I am saying practice your due diligence and get some professionals involved before you get too jumpy
Originally posted by @Dennis M. :
There is likely a good reason why it’s half the price of other houses in the area and I doubt that reason is because you found the deal of a lifetime . I’m not saying it’s a no -go ,but I am saying practice your due diligence and get some professionals involved before you get too jumpy

if those numbers are correct that's about as good as it gets spread wise in the Portland market.. 230k ARV is one of the very cheapest areas of the city if its a free standing SFR detached.. and you say its on septic that leads me to believe its not in the city..

and seller warranting that stuff is worthless.. just try to collect after the fact when he is long gone with your money.. 

get a good contractor in there to assess the condition and what it will take to rehab.. 30 to 40k in our market is basically cosmetic only.

You're going to want to factor in closing costs on the front and back end as well as holding costs. If this property is outside of Portland, and my guess is that it is, you may be sitting on the property for several months before it sells. Talk to an agent and find out what the inventory of houses listed is in that area which will give you an idea of how long houses are sitting on the market.