Re: 1st Flip - Posted by InfoNet
Posted by InfoNet on July 06, 2001 at 13:05:33:
It would be helpful to know WHY the seller is motivated.
Also, find out what the cost of repairs would be to a potential rehabber – you’re going to have to get a price from the seller that discounts the appropriate amount for the repairs, plus allow an acceptable profit for the rehabbers once they fix it and sell it. And of course, you need to build in your profit as well.
Problem: Seller wants “appraised” value for the house. Is this “tax” appraised value? “fair market” appraised value? Is this “appraised” value you speak of based on the current condition of the property or the value of it once it would be fixed up? (I’m assumming it’s for the current condition.)
As I have read, many experts don’t utilize appraised value anyway, but rather are interested with comparable sales of similar property in the area.
Find out what it would be worth once repairs are done, then you’ll have a better idea of the profit potential.
A double closing sounds like a good idea so you don’t have to come up with any money yourself at the closing table. The new buyer you found to flip it to will be the one who has to produce a check. (Make sure your attorney or title company is familiar with doing this) And if you structure it right, you should get a healthy profit out of it. Refer to the HOW TO articles and SUCCESS STORIES on this site to get examples of what I’m talking about.
See ya later!