About the house:
2 Bed/2 Bath, 1088 sqft. The owner inherited from his father that passed, who had a reverse mortgage and the company now wants their money back in full or they are going to foreclose within a few weeks. Hes desperate to sell now. Originally asking was 43k, then 38k, and now 32k... He owes 28k and is willing to pay all closing and the back taxes of about $700 so he's really not making anything from this deal. Im assuming from the way to talks he just doesnt want the company to get it. The tax assessed value is 59k.(Not sure how helpful, if at all that is) We had an agent run and print comps for us. The comps are 30-50k but not one of those are renovated home. The area is an average to slightly less than average community. But not a dump or "war zone" by any means. My husband's best friend is a great contractor, and he went out to the property for us and gave an estimate of about 12k for a full basic remodel. No major repairs needed. Roof, foundation, ex all good. We found we couldnt get financing to do a fix and flip ourselves because it is under 50k , but we have someone interested in purchasing via wholesale from us. This seems tight for a fix and flip, but he's interested in it as a rehab and hold. Which it SEEMS like a good potential hold once I thought about it. It has great access to major roads, but not too close that noise is a factor. Its very close to major colleges and shopping, all of that. Now, I had acquaintance investor tell me I have to go by the comps 30-50k regardless of if they were renovated or not, but it doesnt make complete sense to base my rehabbed homes' sale price off of non-rehabbed home... Rehabbed homes sell for more than non rehabbed homes all day long... So Im coming here to ask all of your opinions on this "potential deal". Is the investors advise correct? I have to go by unrehabbed comps for my rehabbed homes potential sale price? Or would it be ok so assume that it may sell for at least 60 or more, which in that case would be a decent return... our C buyer would be in 47k after all said and done. (32k our purchase price + 3k for our wholesale fee + 12k reno). And possible ARV would be 60 or more... But even then, maybe thats too tight for a fix-n-flip but what about a buy-n-hold? Would this make more since for someone like that? It seems like maybe it would depending on rental prices around that area, which I expect with the colleges and such, should be decent. I want to make sure as a new investor, that Im not advertising false "deals" and lose interest from my possible C buyers right off the bat. This would be our first "deal" if it goes through. Any advise is welcomed and appreciated. Give it to me straight... maybe Im completely missing something here on my logic of this deal...
Have you tried to market the deal to potential flip and buy & hold investors in your area and see what their feedback is? To me it seems more like a rental than a flip deal.
Sorry, but one thing that will help the readers better read your post is if you broke it in few paragraphs.
Hi, you seem to have a pretty good grasp for someone new at this . I'm even newer at this than you. Curious ... How did you find your cash buyer. Someone you already knew, website...? That's my biggest concern .
Thank you Sharad for your response. I do not have a buyers list yet as I am very new to this. My husband is marketing it on a website and we got a response that way. He advertised it as a buy and hold rather than a fix and flip, since we are not sure exactly just HOW tight the margins are. It does seem to make a little more since as a buy and hold.
Sorry about the run together... I usually do break my posts apart. Just had to much in my mind I wanted to get out before I forgot anything so kind of ran this one all together.
Was this property listed on MLS or is this an off market deal? If MLS deal, then chances are most of the investors in the area have already looked at it and passed for one reason or the other.
If off market deal, then put it on Craigslist and see what kind of response you get. You can also list it on MLS using a flat fee service to get more exposure.
No it is not on the MLS...
My husband and I are doing this together. He's a lot more aggressive than me. I tend to try to learn all about things before I do them and he's more of a "jump out there and learn as you go type." We found this home, seller trying to sell himself and not listed on MLS. At first we wanted to fix and flip ourselves, but we only have access to one lender, who will not do deals under 50k, so with that out, my husband wanted to try and wholesale the deal, so without a buyers list built yet, he posted it on a website and he got this current response in less than 24hrs... I dont think we will have an issue with building a buyers list with time and effort, but for now, we got our first hit using a website.
what will it rent for?
Do you have any cash?
It looks better suited for a rental.
We dont look at MLS for wholesale deals. I've heard many "newbies" do that, but that doesnt even make since to me. Like you said, everyone has seen those... No wholesale potential there I dont think... We are focusing on finding homes off the MLS
No cash so we have to wholesale...
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