(I am a newbie and this is the 3rd house i've pursued ) this may be the obvious to some. Is it wise to pay appraised value? recently got a lead, the guy who has the property is a flipper and says that he does a couple a flips a year, the house is a 4bd 2ba garage and 2 levels, in a very decent neighborhood. For example the house is appraised at 100k and that's his asking price to sell it in the middle of his rehab as is, with the work he has already done he quoted 20k to finish it, ( this does not include my fee), the house has potential to sale for 150-160k which was his numbers, I also did some home work and it seems that he is right (I don't have a realator to pull comps so I done what was advised by "gurus" and use other resources). All input is greatly appreciated!! Thanks
It really depends on your comfort level to complete the flip. If you have done your homework and received a couple quotes from contractors to confirm the 20k in repairs quote, and then it would be nice if you can reach out to a realtor to confirm the ARV (maybe you can list the house with them if that ends up being your exit strategy)..
You will need to give a little bit more info for anyone to determine if this is a good deal. Do you plan on buying and holding? Flipping? Remember to factor in closing costs and realtor fees if you are flipping for full retail on the MLS.
o OK thanks, I just plan on wholesaling it, I guess my question is, is this a good idea for an investor?
a whoesaler wants to wholesale it you and you want to whoesale it? There probably little chance of success too litlle profit left after the 1st sale to you
Why would a "flipper" be willing to pull out in the middle of a rehab?
He's knows something you don't... Negative grasshopper...
Im not a flipper, nor am Im a mathematician, nor am I a season investor. Im learning just like you are, but based on my quick analysis I don't think this will be a good deal for a flipper.
maybe a buy and hold investor, if its yields a high rent.
Theres just not enough room in there to sell to a flipper.
Purchase price is 102 (assuming you only take a modest 2k fee)
102,000 + 20,000 (est rehab) + 4,000 (contingency) = 126,000
126,000 + 1,200 (3 mo holding cost assuming a cash purchase) = 127,200
ARV = 150,000 (real sale price will be closer to 140,000)
140,000 - 8400 (realtor fees) = 131, 600
131,600 - 127,200 = leaves a 4,400 profit, assuming the buyer needs absolutely no assistance
great points, they said amythings for sale in his book, so I figure it was worth investigating and trying to get to the bottom of this situation. Thanks everyone
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