Wanting to make an offer on a property but not certain what to offer.
Preference is to wholesale. If so, what should I place the property under contract for?
I am open to a rehab (although it will be my first). Financing on a rehab would most likely be hard money.
The biggest issue is that I need to move quickly to get the home under contract, but am not certain what the cosmetic repairs would cost. I have attached photos for reference. The foundation repair estimate has already been done and is in the details below.
Property Type: Single Family Residence
Beds/Baths/Living area: 3/3/3
Sq. Ft.: 2,417
Asking Price: $160,000 ($66.20/sq. ft. approximately)
Foundation Repair Estimate: $15,000
Other Repairs/Upgrades: ??? this is where I get fuzzy (it's mostly cosmetic)(see photos)
After Repair Value: $240,000 ($100 sq. ft. approximately)
This home is located in a nice neighborhood in Dallas, TX. Homes on the street are selling between $220K and $270K.
Please see photos below.
Thanks in advance for your responses.
There are alot of resource on BP for how to estimate rehab costs, you should do a search on the forums, or check out @J Scott 's book.
2400sqft is a reasonably large house so that even a cosmetic rehab can add up quickly. Since it looks like a slightly older property, I'd include a contingency factor for any hidden issues that you can't see until the rehab starts.
Don't forget to include your holding and other soft costs - HML payment on this project would probably be over $2k/mo for example - how long would the rehab take?
My best advice would probably be to walk through the house with a contractor that you trust, and get an accurate quote, then go from there.
I know that house. There are already offers submitted.
what dose your gut tell you stick with what you know or take a chance, if you take the price of 240 after the repairs then you have a $80,000.00 window to break even the question is how much for repairs VS put under contract and monies you would make for that
@Dmitri L. Thank you for the advice. I'll check out the references you've suggested.
@Hattie Dizmond Thank you for your response. I'll verify with the realtor.
@Mark Curry I like the fact that you are asking what my gut tells me to do. I think I know which way to go on this one. Thanks!
@John Hyatt Thank you for responding with numbers. You have helped me with some calculations that will at least get me in the ballpark of what I need to offer. I'll view the property today and make a final decision. Really appreciate it!
Thank you all so much for your time!
If you decide to wholesale this house please reach out. I would be interested in taking a look.
Thank you for your interest, Lucas. I sure will let you know. Thanks!!
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