All Forum Posts by: Reggie Wright

Next meeting is in Odessa.

https://www.meetup.com/Permian-Basin-Real-Estate-I...

My MAO was $11.3k not $113k.

The math: ARV $83.3k - Repair cost $48k - Flipper's Profit $20k - Wholesale fee $3k - Buffer $1k = $11.3k

There was no way the ARV would be $123k, that translates to $125 per sq ft which is way too high for that neighborhood. I came up with $83.3k ARV - a couple of local investors agreed was reasonable for the area.

I've been thinking about what kind of buyer purchased the property. Definitely not a flipper because of the high purchase price (they offered $38k cash). Maybe a buy and hold investor because a 3/2 home in that neighborhood could rent for $950. But there's much better buy and hold deals to be had in our town for that price (especially since that one is a major fixer upper). 

I figured the most likely buyer is a DIY'er who is going to end up living in the property.   

An update for the folks who took the time to reply:

The contractor estimated the repair cost to be $48000

This made my MAO $11300

I called the seller...and the house was already sold. Someone offered $38k cash. 

It was a good practice run, plus I learned I've got to be faster next time. 

I didn't realize that you had already sold the property. Good job on getting it done! 

I'm with the others, good job on taking action. Wondering what to do next is a better problem to have than the problem of having no deal at all. Hobbs isn't far from where I am but I don't know anyone there. I recommend getting in contact with the REIA in Hobbs as well as Odessa and Lubbock. Perhaps you will find a buyer there or someone who can help you sell the property.

Thanks for the feedback. I'm a little worried about the deal because there might not be enough meat on the bone. I got comps from a real estate agent. He said $100/sqft. I'm going to be conservative and discount that 15%. The house is 980 sqft so the ARV should be $83300. But the house looks like a huge remodel. I guess it all depends on the quote I get from the contractor. The guy I'm selling the contract to knows what he's doing so he can review my numbers as well.

I've come across a potential deal and I would value the opinion of experienced real estate investors. 

I'm going to visit the property with a few contractors to get an estimate of the cost. 

My exit strategy is to wholesale to a flipper. 

I'm looking for any general advice on what to look out for. 

Details:

Asking $45k

3bd/2ba

$8k mortgage

Will be an extensive rehab 

Are there any investors in the Odessa / Midland area that has bought a property using subject to? I've been soaking up material about subject to and it would be great if I can talk to someone who actually has experience. So if you're in the area I'd love to sit down and talk about it over lunch (on me!). Send me a message or post a reply.

Ok, thanks pointing me in the right direction

@Brian Gibbons can you explain what you mean by selling on a lease plus right of first refusal? Is it like selling a property on a lease option?