I am a new birddog but i read the birddog 101 article and have it memorized. I found this lot with two almost identical houses next to each other. I think they would be NOT be classified as a rehab but they are kinda shabby, i cant see inside. The houses are in the perfect location east end rich side of town, seriously. This is what i got so far:
Max Selling Price 1: N/A (Cash Flow)
Acquisition Cost 2: - 1000
Repairs (estimated) : - 1000(cant see inside)
Four month Average. Hold Cost : -(not a rehab)
Min Profit (15%) : - N/A monthly cash flow?
Misc expenses (5%) : -1500 (paint, bushes, etc)
Cost to Sell (5%) 3: - N/A cash flow
Max Purchase Price :
Additional (Not covered by loan) expenses : N/A
It would be the ideal cash flow investment. I mean they would need a little cleaning up but not a rehab. So i want to put an option on this i would go contact the owner or the realtor? Draw up a contract then pay'em so much a month to keep the option valid and then advertise the property? Should i try and make some rehab contacts?
I'm sorry this is a little hard to follow. Are you trying to birddog this to an investor? If so, what makes you think this cash flows? The numbers are missing. Before you even try to get it under contract, get your numbers together.
i duno. Im just saying if it had a little cleaning up it would rent easy. Maybe flip huge profit. Two nice new houses in the perfect spot in town why wouldnt it.
Location doesn't make a deal. Numbers make deals.
The only way you can figure out if this is worth your time is to find out what you would pay for the property, what the After Repair Value of the home is, and how much you will spend on repairs.
70% of the ARV minus the cost of repairs is your max paying price ( even less if you plan to sell this deal to an investor)
Furthermore if you plan to push it as a rental, you need to know the rents and the expenses for the property.
Max Selling Price $160,000
Acquisition Cost 2: $110,000
Repairs (estimated) : - $15,000 (Roof, Paint, Lawn, ETC, Ill get more info tom.)
Four month Average. Hold Cost : $4384 (125,[email protected]%10.00 interest rate)
Min Profit (15%) : $30,000 (give or take)
Misc expenses (5%) : $-1,500 (anything else)
Cost to Sell (5%) 3: (What? $4000 or $5,000 for realtor?)
Max Purchase Price : $130884
My max price came from comps search that yeilded $200,000 avg sale price in this zipcode. I figure this is very conservative estimate.?
Granted i am new to RE, if the numbers are acurate should i go for this? Or hand it to someone else until i can learn more? Thanks minna
If the property would be worth $160,000 after repairs, and repairs cost you $15,000, you can't be paying more than $97k for the property.
Just use this formula -
ARV (After repair value) X .70 - Repair cost = max purchase price.
An average sales price for the area is way too general to give you an ARV. You need more accurate comps than this.
Also, if you plan to hold the property for 4 months and rehab it, you are the rehabber, not the birddog.
Im not a rehabber im just analyzing this property that for sell. So 30 grand is not enough to go through with it? I would if i had the money! How do i get more accurate comps? I used this website ABC's of RE. So if the seller wants less than $97,000 should i try and birddog this property? I dont want to waste anyones time or accidently screw somebody over.
If you can get it for less than 97, and your 15k is accurate, by all means go for it. IF YOUR 15K AND YOUR COMPS ARE ACCURATE. Otherwise....spend your time educating yourself instead.
how do i make sure my comps and repairs are more accurate? I drove buy a couple of times.
The only way to make sure your repair estimate is accurate is to go and inspect the house inside and out yourself. If you do not know how to figure repair costs take someone with you that does, or at least come back with someone that does later if it appears that it might be a good deal.
Some of the ways to determine your ARV correctly is to
1. If you have access to the MLS, look at houses that have sold within the last 6 months within a half mile or so, with similar square footage, number of beds/baths, style, etc. Also, look for similar houses for sale and check their listing price. This will be higher than the ARV, but you will know what your competition is... you could even find a better deal that way! :-)
2. If you don't have access to the MLS but the house is for sale through a realtor, get a realtor to show you the house and do the above for you.
3. Look in the public records and find do the same as #1. This is much more difficult.
4. Find the house in www.zillow.com and look at the comparables that they show. Don't believe their estimate for the worth of the house, but this is a quick way to get comparable recently sold's and the prices they sold for. Just keep in mind that these houses were likely in all different conditions so you will want to throw out some low and some high if there are a lot of them.