So... after searching high and low I found a property that I wonder if it is even a good deal or not.
List price: $299,000
ARV: $400,000 (based on 5 really good sold comps on local MLS)
- Selling costs: $14,000 ( i have an agent that will list for $2000, so figured about 3.5%)
- Estimated repairs: $75,000
- Holding Costs: $15,750 ( i estimated based on
Lets say its 5 points and 15% using hard money for 6 months)
- Buying Costs: $52,500 (25% down)
- Purchase Price: $210,000
= $35,848 potential profit
Initial hard money loan: $180,000
now i know this is probably not how I do this, im kinda new to this evaluation of properties that is what got me some bum deals in the past. And i know the numbers are probably not exact, that is not my point here. What I need help with is identifying what I am missing and how to improve my processes so when another deal comes along I am evaluating them properly and MAKE SOME MONEY!! And I really would not be opposed to a mentor.
no money in it based on list price
Holding cost $15,000
Selling costs $14,000
A loss of $4,000 based on list price.
At $210,000, much better, if the rehab estimates are right, and the holding costs are right and that's a big IF. It all depends on what you can buy it for. I doubt it will sell for much less than list unless it has been on the market for ever and you can close before year end.
Did you go to Analyze tab above?
Good place to start - but I feel more comfortable when I run it through a spreadsheet myself. garbage in garbage out.
I guess i don't know why I put the list price because it is irrelevant. I can get the property for $210k, i already walked through the property and have a pretty good idea that my rehab costs are pretty good. Not exact but they never are.
then it looks good. Get after it.
When you say ARV, do you consider that value the same as what you will actually sell for?
What is cost of hard money loan?
Unless you are highly experienced, I might suggest you are putting a lot at risk here. I might suggest a smaller deal, if this is your starting project.
@joseph ball I actually appreciate your suggestions, that is what I am looking for here. I am new and I would rather it not be sugar coated at all. I look for what outsiders to this situation look at and analyse in researching their deals. Am I missing or overlooking certain big things that could affect this or any other deals.
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