3bed 1.5bath SFH Motivated seller - I need help on this one

9 Replies

So I talked to my first lead today. 

Info I received;

3bed 1.5 bath

744 square feet - 1 acre of land

Block home built in 1938

Minor repairs(I'll take pics upon viewing) but has all new windows and roof is 9 years old.

Motivated to sell because of relocating and can't afford double payments. Seller has no time and money to deal with property. 

Seller is unsure of the loan balance but he did agree to consider selling for what's owed😀 I'll have loan balance info tomorrow.

All bills and taxes are up to date.

Sellers asking price - $70,000

After asking him if I paid cash and closed quickly on the property in as is condition he dropped price down to $62,000

Now how would I determine the Repair, And ARV quickly.

I was thinking of getting an appraisal but I never done that before and then getting a bid from a contractor for the repair cost. 

Any input anyone.. if everything goes good this could be my first deal.

Well first you should not of got the property under contract without knowing how much $ was needed in repairs and either having an agent or your own review of comp sales in the area. What if the ARV is $70,000 and it needs $20,000 in repairs? I would quickly have a contractor review property to give you estimate for repairs and run your own comps to see what values are in the area. If the deal doesn't work then better to lose your EMD than owning an upside down property

Jared K. Really? Wow OK man I would appreciate that so much. With me being new I've already had other investors steal deals away from that I originally found to begin with but that's fine. I have alott to learn but I feel I'm doing good. Finally got my head out the books and I'm actually doing something.

Hi @Jamael Reed

I think you can learn do your own comps. SFR sales are listed in Zillow or Trulia. Sales are what count, not listed, not Zestimates, only actual sales. Don't ever use Zillow's Zestimate.

Here's how I do it. Look for recent sales near your subject property (less than 90 days, within 30 are great), same bed and bath count, and close in square footage. Close in distance is important. Beware of dividing lines like major roads, railroads, streams, strips of empty land, city or county lines, etc. Crossing a major divider can drastically affect price.

The more similar and the more recent then the better the comps. Try to find 3. 

If the houses are too different or sold too far back in time, then try to find the $ per square foot for near and recent sales then multiply by your square footage. $/sq ft is listed on recent sales on Zillow.

Beware of distressed sales or REO sales which can skew your prices lower. MLS listed homes are best to find retail prices. All of this, of course, IMHO.

@Jamael Reed , to help you with your comps, I recommend paying close attention to "distressed sales or REO sales which can skew your prices lower", because those are the comps that savvy Investors take note of when working out their own Maximum Allowable Offers. Why Offer more? Cheers...