Mansfield, TX · Member since 2016 · 19 posts · 3 votes
Ok, we have a possible deal on the table and need some recommendations on how to approach. We have a property that the owner is willing to seller finance (it would be a wrap around mortgage) on a property listed for 175,000. The ARV is around 210,000 and the repairs with the enlisted assistance of myself and hubby come in at around 10K. If we can get the property ready for a flip in 1-2 months, what type of offer should we put on the table?
Wholesaler · Ojai, CA · Member since 2016 · 107 posts · 74 votes
10y
IF this was Deal or No Deal, my answer is no deal!! MY math comes in at you profiting $9k when you are done.
$210k less RE commissions and closing (6%)= 197,400 less rehab 10k= 187,400 less insurance 500 and less property taxes assuming 6 months to resale 800 (total 1300)= 186,100 now less 6 months of payments (assuming 20 yrs at 5% is 1154.92/mo) $6929 of which 2600 is for principle so subtract interest of 4329 and you have total left of 181,771. Principle is now, 172,400. Profits = 9371
This is assuming, you can actually rehab at 10k only. No permits needed no hidden expenses. And that your comps are accurate. Too close of a margin for the headache. Check your market rents and see is you could profit from being above your PITI though. Still might be able to work the principle down over time and make a couple hundred a month in process.
Mansfield, TX · Member since 2016 · 19 posts · 3 votes
10y
Thank you Art, I appreciate your response. Your numbers and analysis definitely make sense as was our initially assessment. So yes, it is a No Deal and we're on to the next one!
Flipper/Rehabber · Los Angeles, CA · Member since 2019 · 27 posts · 1 vote
7y
Seems like a silly question but once you do find a property you want to purchase directly from the owner, what's the next step if you aren't using a real estate agent?