Hi, looking for purchase price advice.
I'm looking at a bank owned 3b 1ba 1300sqft 2 story home with large 2 car garage and fenced back yard that has been listed on the MLS for about 160 days. The neighborhood is quiet and in the middle of 2 cities, one 40,000 and one 70,000 pop. About 10 miles from each. The house is listed for $45,000 but after talking to the listing agent he knows it needs to drop in price. The house also needs a lot of work that I have calculated after getting different contractor bids and my own knowledge on rehab. Should be around $35,000 rehab costs. This is all still dependent on an inspection of the well and septic before purchase because I think that will change things big time if they are I need of repare or replacing. I have also calculated about $15,000 in fixed costs. So looking at the numbers it would be about $50,000 in rehab and fixed. The comps of 3:1 houses in the area are about $110,000. I'm looking for others thoughts on what my MAX purchase price should be and possibly what my start bid should be?
Max I would go is 30k if the project is worth it. Id really prefer some where around 20-25. I don't know what the fees are for closing costs and realtors in your area but I put 7%. Which means an extra $7700. You may have counted that in your fixed costs, but I have found I seem to always forget about that till the end. As your first flip, you don't really need to go for the home run. Make sure that what you're buying is a solid house that will sell fast. The big flippers get the best deals consistently and it's hard to compete with them. It took me six months of searching to find a house for my first one and it was one that was bank owned and kept dropping in price.
Hey thanks for the advice. Yes I calculated the closings and Realtor costs in that fixed price. Its usually 6% around my market. The $30k is what I was thinking as well for max.
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