Analyze This Deal!!!

Wholesaling
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Analyze This Deal!!!

Javon Johnson
Trenton, NJ · Member since 2017 · 3 posts · 0 votes

Bonjourrrrr everyone!

Ok, obviously wet behind the ears here, I literally just made this account to ask this question so please don't butcher me for my ignorance but I have finally received my first phone call from a potential seller and I have listed the comps below. These are not comps that I have received from a realtor but just from looking into Zillow, Google, etc. 

Single-Family [NEW JERSEY] Home

Bds: 4

Bths: 1

Sqft: 1098

End game: wholesale

Why selling: Has been sitting for some years now; Church next door owns property; last tenants let it go to crap; church doesn't want to continue paying the taxes on property (too high)

Zestimate/ARV: 239,268 (hoping to rehab it to 300K)

Neighboring properties: 230-300k

Asking Price: as close to 70k as possible; pretty sure I can get it down to 50k

Repairs: 70-100k+/- everything needs to be fixed

  • roof (Google says: 7.5-8.5k)
  • inside needs to be gutted
  • soft floors
  • walls
  • electric (Google says: 8-15k)
  • ceiling
  • plumbing - pipes broke (Google says: 8-10k (copper) ; 4-6k (PEX))
  • cosmetics (about 35k)

I will be taking my uncle who is a contractor with me tomorrow to physically look at the property.

My questions are:

1.) With a home that needs everything done, does 100k sound appropriate or does it typically cost more to rehab everything?

2.) Are the numbers Google gave me on the approximate rehab costs for each project close to being accurate or is it more or less expensive?

3.) What other numbers should I be worried about going towards closing besides: offer, wholesaler profit, offer to buyer, rehab, ARV, and buyer profit? I've heard about closing costs and paying off liens and such. I would like to incorporate those numbers I don't know about into my numbers sheet so that I can adjust my offer.

4.) If it's going to cost more than 100k (or not) to rehab, would you take this deal? How would you handle it?

5.) If 100k is about right for rehab and I am able to talk the seller down to 50k, would it make sense to assign to buyer for 100k if they can meet the 300k ARV? If not, what number is appropriate?

6.) Should I double-close if I can get 50k profit from this?

I think regardless this may be a great deal. I don't see rehab costs going too far over 100k so I believe as long as my buyer can make 70-100k on this property, it is definitely worth putting under contract. Yay or nay? Thanks guys and gals.

God Bless.

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Scott Upshaw
Bridgewater, NJ · Member since 2015 · 100 posts · 31 votes
9y

Hey man..nobody on here will be able to give you advice on what your asking. It is rather impossible without see any pics or knowing anythung about property. I can tell ypu from experience tho..a 100k reno is a pretty extensive renovation. If you dont know what you are doing..put it under contract and wholesale it. I dont know all of trenton, but a 300k arv for a 1,000sft house sounds rather high...hope this helps

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  • Scott Upshaw
    Bridgewater, NJ · Member since 2015 · 100 posts · 31 votes
    9y

    Hey man..nobody on here will be able to give you advice on what your asking. It is rather impossible without see any pics or knowing anythung about property. I can tell ypu from experience tho..a 100k reno is a pretty extensive renovation. If you dont know what you are doing..put it under contract and wholesale it. I dont know all of trenton, but a 300k arv for a 1,000sft house sounds rather high...hope this helps

    1Reply
  • Jason Timmerman
    Howell, NJ · Member since 2016 · 87 posts · 56 votes
    9y

    First and foremost,

    Where is this property located?  1100 sq ft is TINY for $300k.  I think you may be overestimating the value of the house. 

    Second, if an 1100 sq ft house needs $100k worth of reno work, it's a tear down.  Plain and simple.  You can build a new spec home at about $100/sq ft., so a home of that size would cost $110,000 to build, brand new.  With the plumbing being one of the major issues, you've probably got a ridiculous amount of rot and foundation damage and it needs to be torn down and the land needs to be regarded.  So add $40k to your repair estimate.  

    Third, my guess is that you are going to have to install central AC and all of the duct work as well.  As I said initially, this is a tear down.  If wholesaling you have to think of the value of the lot, not the value of the home on it right now.  A spec home builder may be interested in the lot if the surrounding areas are as valuable as you say.  So, basically, the town and neighborhood location is key.  Where is this property?

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  • Javon Johnson
    OP
    Trenton, NJ · Member since 2017 · 3 posts · 0 votes
    9y

    @Scott Upshaw @Jason Timmerman the ARV is not 300k its 239k and thats straight off zillow. I only asked if it could be rehabbed to 300k to maximize my own profit. The property is located in Lambertville which is as suburban as it gets so that's why I guess it's 239k for 1100 sqft. The entire lot size is 9375 sqft

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  • Javon Johnson
    OP
    Trenton, NJ · Member since 2017 · 3 posts · 0 votes
    9y

    They have houses in the same area with 800-900 sqft that cost upwards to $285k that's actually listed for sale on Zillow so it can't be that hard to fathom

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  • Yashar E.
    Real Estate Agent · Gloucester City, NJ · Member since 2016 · 67 posts · 30 votes
    9y

    Hey @Javon Johnson it is tough to give an accurate answer on these types of questions without the address.  

    If I am looking at comps I am not only checking surrounding prices but checking for major highways/roadways/railroad tracks that separate different sections of the neighborhoods, I also look to find the same exact model houses for my ARVS (I don't compare rowhomes, ranchers and 2 story colonials with each other).

     Another good tip is check multiple websites to compare the specs of the property, and then go visit.  Too many times zillow (and possibly all other sites) will have a certain sq. footage listed.  However, when you go to visit the site there is another addition or plain and simple more sq. footage than originally noted.

    Also...

    1) 100K for a 1100 sqft sounds like a gut job

    2) Then again you may be overestimating (I have never gone by google numbers can't imagine they are correct)

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  • Chris Anderson
    Manville, NJ · Member since 2015 · 140 posts · 59 votes
    9y

    I am a contractor and rehabber. A full gut with siding and roof. Should cost around that 100k Mark. I have done many. Sounds like if you get it for 50k there is money to be made.

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