URGENT!! Local Investors, please HELP! (High Desert, So. Cal.)

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URGENT!! Local Investors, please HELP! (High Desert, So. Cal.)

Lisa Tolan
Victorville, CA · Member since 2017 · 37 posts · 15 votes

I have gotten a response from a yellow letter that I sent for a property that I found driving for dollars.

The property's potential ARV is $145K and just based on the outside of the property, it looks like there is about $35K worth of work.

I know this is not a lot to go on but as a wholesale deal, is it worth it to put it under contract for about $80K, contingent on seeing the inside and getting a more accurate ARV just to get the deal going?

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William C.
Real Estate Agent · Souderton, PA · Member since 2016 · 591 posts · 414 votes
9y
Isn't that something you ask on the first phone call? That way you don't do a whole lot of leg work, get other people involved, create an urgent thread for everyone's advice, only to find out the seller is not on planet with their price?
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  • Account Closed
    Johnson City, TN · Member since 2014 · 586 posts · 705 votes
    9y

    Why is this urgent?

    4Reply
  • Mike Flora
    Investor · Menifee, CA · Member since 2015 · 534 posts · 216 votes
    9y
    How much equity is in the property with the current seller??
    1Reply
  • Lisa Tolan
    OP
    Victorville, CA · Member since 2017 · 37 posts · 15 votes
    9y
    Originally posted by @Account Closed:

    Why is this urgent?

     Because I trying to get a deal before another wholesaler does. I'm just trying to get advice if my idea is a good one.

    0Reply
  • Lisa Tolan
    OP
    Victorville, CA · Member since 2017 · 37 posts · 15 votes
    9y
    Originally posted by @Mike Flora:

    How much equity is in the property with the current seller??

    0Reply
  • Lisa Tolan
    OP
    Victorville, CA · Member since 2017 · 37 posts · 15 votes
    9y

    The seller says she owes about $50K.  So if the property is worth about  $80K as is, then $30K equity.

    0Reply
  • Mike Flora
    Investor · Menifee, CA · Member since 2015 · 534 posts · 216 votes
    9y
    For a flip with those numbers I would pay about 70K or so. Look at other numbers as well.......how much would it rent for and is it a line house out in the middle of nowhere??? (Says high desert?) I believe you said it was vacant? Which is a good thing for a flipper, no tenants to deal with, it's ready to work on immediately. What's the properties inside numbers?......bed/bath/SQFT/year built???
    0Reply
  • Lisa Tolan
    OP
    Victorville, CA · Member since 2017 · 37 posts · 15 votes
    9y

    Its a 3 bd/1 ba, 1126 as ft, and built in 1987. Rent estimation is about $1100/mo. It's in a decent neighborhood.

    It is vacant, and back glass door is boarded.  Seller says that's just so no one can break it.  Seller says she is sick and can't make it to the property, so we haven't seen inside yet.  I have no problem going to her if she's willing to give access.  I'm just trying to get a good guesstimate to give her, as accurate as possible, reserving the right to change that amount after seeing the inside.

    0Reply
  • Mike Flora
    Investor · Menifee, CA · Member since 2015 · 534 posts · 216 votes
    9y
    Sounds like you might have a deal then. Work with AJ on it, he seems to be interested and I don't invest in that area. I would be in the 70K's somewhere for you to get it under contract. Then you should have some room for your assignment/double close profit. Good luck to you!!
    0Reply
  • Lisa Tolan
    OP
    Victorville, CA · Member since 2017 · 37 posts · 15 votes
    9y

    Thanks for the advice!

    0Reply
  • Dylan VargasPro Member
    Rental Property Investor · Chico, CA · Member since 2016 · 625 posts · 336 votes
    9y

    @Lisa Tolan Def try to get for closer to 70k if 35k needed (after you see of course and evaluate again). 80+35=115k. %6 for closing and selling commissions at 145k = approx 9k. Now you are at 124k. Carrying hard money costs or loans? 2500? Now 126k. So at this point the investor still has utilities and many little things that ad up. If He/She is in it for 130k thats 15k profit minus wholesale fee. Not really worth it in my opinion unless bored, beginner and would sell within a week or so. All these numbers are approx and many different factors (such as investor may not have carry loan costs). Just putting this out there for you to see how a flipper or investor may be looking at it. Then again an experienced investor could get more price cause he/she could increase the ARV based on the rehab. Anywho, hope this gets your brain thinking and analyzing.

    2Reply
  • Lisa Tolan
    OP
    Victorville, CA · Member since 2017 · 37 posts · 15 votes
    9y

    It does.  Thanks Dylan.

    0Reply
  • Nick Hedberg
    Real Estate Agent · Venice, CA · Member since 2015 · 182 posts · 125 votes
    9y

    I would see the property before putting it under contract. The interior could be pristine or could have water damage and be covered in mold. I completely understand your impetus to lock it down quickly, but I would tell her you are willing to come to her to pickup the keys.

    If she won't let you see it, I would make sure your offer is 'subject to interior inspection'. That way you'll have an out in case you find something once you inspect it.

    0Reply
  • Lisa Tolan
    OP
    Victorville, CA · Member since 2017 · 37 posts · 15 votes
    9y

    That is my plan, thanks Nick.

    0Reply
  • Ben Wilkins
    Rental Property Investor · York, PA · Member since 2017 · 377 posts · 315 votes
    9y

    @Lisa Tolan - based on the 70% rule, you're looking at $66,500 for a purchase price.

    (ARV) x (.7) - (Repair Costs) = Estimated Purchase Price

    While this isn't a set price, it at least gives you a guess on what a flip property is worth

    Hope that helps!

    0Reply
  • Lisa Tolan
    OP
    Victorville, CA · Member since 2017 · 37 posts · 15 votes
    9y

    All input is appreciated!  Thanks Ben.

    0Reply
  • Lisa Tolan
    OP
    Victorville, CA · Member since 2017 · 37 posts · 15 votes
    9y

    Hey guys:

    Guess what?  The seller wants $130K, LOL!

    I guess it's back to my other potentials.

    0Reply
  • William C.
    Real Estate Agent · Souderton, PA · Member since 2016 · 591 posts · 414 votes
    9y
    Isn't that something you ask on the first phone call? That way you don't do a whole lot of leg work, get other people involved, create an urgent thread for everyone's advice, only to find out the seller is not on planet with their price?
    4Reply
  • Lisa Tolan
    OP
    Victorville, CA · Member since 2017 · 37 posts · 15 votes
    9y

    It wasn't a whole lot of off work for me.

    No one seemed to mind helping me out.  That's what we're all here for. If you felt like it's not worth YOUR time to give your $.02, then don't.

    3Reply
  • Robin Boyer
    Surveyor · Hemet, CA · Member since 2015 · 797 posts · 112 votes
    9y

    We all have to learn William give a very new poster break.  She joined last week or so I know you didn't know.  I am making my mistakes as I go that's for sure we all do.

    1Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    @Robin Boyer  its why for 95% who try wholesaling its a waste of time money  etc and will be doing something else in another 6 months.. can't for the life of me understand why people think wholesaling is all that.. of course you have those that do well at it.. but they would do well running a used car lot.. owning subway sandwhich shops or anyother business they just have it.

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    2Reply
  • Lisa Tolan
    OP
    Victorville, CA · Member since 2017 · 37 posts · 15 votes
    9y

    Okay, hopefully I will be doing something different in 6 months, but I don't any deal that can make me some money as a waste of time.  Even when I do become a more seasoned investor, I'll still do wholesale deals if it seems like the right thing at the time.  It seems like wholesaling is  looked down upon.

    0Reply
  • Robin Boyer
    Surveyor · Hemet, CA · Member since 2015 · 797 posts · 112 votes
    9y

    @Jay Hinrichs I know not 1 thing about whole Saling. Was just trying to remind everyone she is a brand new member so she doesn't get discouraged. I actually wanted to ask you a few questions if you have a moment sometime. Thank you jay. 

    0Reply
  • Susan Knight
    Conway, SC · Member since 2012 · 114 posts · 44 votes
    9y
    Lisa Tolan, do what you want to do and don't let anyone bring you down. You did a good job and you are out there trying to get a deal... Bravo. Some people are stuck in Old School ways. Keep up the good work!
    0Reply
  • Lisa Tolan
    OP
    Victorville, CA · Member since 2017 · 37 posts · 15 votes
    9y
    Thanks @Susan Knight
    0Reply
  • Gordon CuffePro Member
    Investor · Roseville, CA · Member since 2009 · 1k+ posts · 583 votes
    9y

    @Lisa Tolanfollow up with her in one month. She can say she wants a million dollars. If she doesnt get it at come point she will get realistic with her sales price. If she really was too sick to show it to you and it is boarded up, she will be getting more motivated and realistic in time. 

    0Reply
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