All Forum Posts by: Phil Z.

Are you talking about the 12 page addendum, or a custom addendum made just for you?

If it's the regular addendum, it has an inspection contingency allowing the return of your deposit.

If it is a custom addendum, it can be very risky and you may want to hold your ground.  It might not be 'just the way it is', but it might be the way they decided to make it for you because they want to play hardball.

    It sounds like you already know the answer.. it's not a good deal.  A good deal is one where you feel like you can't lose.

Also the way you described your offer at $155k + $7k for closing is very confusing unless you paid the banks closing costs for $7k. Your OFFER is $155k. Part of your overall Carrying Costs are $7k. If the ARV is $225k, and the repairs are $80, then your offer should be $100k or less.

    Lastly, $20k for a bathroom and deck is not going to give you any return.  You need to eliminate those repairs or get them done much cheaper.

JD is right.  You need to get the eviction going as soon as possible.  Let the judge give them a 6 month stay which may even require some form of rent.  Eventually the court should allow the eviction when/if they show no cooperation..

Personally I would stay away from homes that old for flips.  There were no building codes in those periods and there could be major work involved with electrical, plumbing, insulation, hazardous materials, restrictions on types of exterior repairs, etc.

As far as value, I would try comp to other homes built prior to 1900.  If there are none, then it may be a guessing game.  In some situations the year could be less of an issue, such as if there was a complete gut remodel.

Personally I would stay away from bidding wars. MLS buyers can easily suck all the equity out of a deal. That's why the best deals are never listed.

3 month rehab + 1 month market + 2 month FHA closing = 6 months to be reasonably conservative.

 Checked my reference and you are correct.

If you don't understand what an S-Corp is good for, you probably should stick to a basic LLC until you contact a Tax Advisor who specializes in Real Estate.

You don't want to end up paying double taxes as an S-Corp (LLC income, then personal salary income). You need to know what tax benefits the S-Corp can take advantage of that an LLC can not. I believe this works well with property management.

  Also, someone mentioned an entity somehow protecting you from being labeled as a dealer? I would double check your facts.  If you are flipping houses as a business, you are a dealer, and you might even require a brokers license.

Don't get too caught up in having a lengthy 'script'. It's very simple to ask the important questions to see if its worth pursuing.  There is no reason to make yourself look like a telemarketer.

The only information you really need is:

1. Does it need a lot of work?

2. How much are you looking to sell it for?

3. What is the Property Address?

4. Is this the best number to reach you?

I'll be there.