Posted by James Strange on October 14, 2002 at 04:53:18:
I always figure a RE commission. Even if I don’t use an agent I still have to pay marketing expenses and usually if no agent is involved most buyers expect a discount. Then I will have 3% to 4% closing cost with or without an agent.
Then what happens if I can’t sale then have to use an agent but I have not budgeted for one? I have to come out of my pocket.
If the deal is so slim that I can not budget for one in my exit plan then it is NEXT!
advice on selling my home to an investor - Posted by Heather
Posted by Heather on October 11, 2002 at 16:15:53:
I hope that it is ok to ask this question here.
We bought a fixer upper in CT and have found that it is too much work for us. We purchased the home for $172.5k and houses in the area are about $210-215k. This is a larger home than most in the neighborhood with 6 bedrooms and over 2100 square feet. So it’s hard to really find similar recent sales. There isn’t much on the market right now. We have replaced the main items like the boiler, hot water heater, gutted/remodeled one full bath, painted, and a new front roof is being started now. There still is more work to be done.
We want to get out of the house what we put into it (about 15k). At that price, we expect that there would be atleast $15-20k of equity after the house was completely fixed up (does that make sense). I don’t know how much it will cost for the rest of the fixup but I would imagine that there would still be a decent profit of $10k (for someone who does the work themselves it would be more).
What are my chances of finding an investor to take this house off of my hands? We don’t want to do any financing. So the investor would have to get a new first mortgage. I’ve never sold a house without a realtor before nor have I sold to an investor. I don’t want to waste my time or money putting FSBO ads in papers if noone would even be interested. You guys are the experts. Is this worth pursuing?
Re: advice on selling my home to an investor - Posted by James Strange
Posted by James Strange on October 12, 2002 at 19:55:11:
Understand that I am not even close to you, but just to let you know how I would look at the deal.
Lets work this out.
Fair market value 210,000
10% transaction cost to sale 21,000 (re commission etc.)
I may have to cary it for three or 4 months. Lets just say payments of 6,000.
Repairs, no idea? lets go another 15,000.
Lets recap.
210,000 FMV
-21,000 transaction cost.
-6,000 for payments.
-15,000 for repairs.
-10,000 profit (btw 10K on this deal is not a decent profit)
This gives me a total of 158,000 that this house may be worth to an investor. Your best bet is continue with the repairs and sale it to an owner doing a FSBO.
Re: advice on selling my home to an investor - Posted by Hallina
Posted by Hallina on October 11, 2002 at 23:53:11:
I’m no expert, but I would suggest renting the property out “as-is”, just temporarily. Then selling the note for cash! Having a renter will make it much more maeketable as a “cash flow” note. If you decide this way, there’s a GOOD chance I could locate a CASH BUYER for you. That’s the line of work I’m in!
Re: advice on selling my home to an investor - Posted by Heather
Posted by Heather on October 13, 2002 at 22:38:26:
I appreciate your honesty. I don’t fully understand the $21,000 figure unless that is supposed to be closing and realtor commissions. That sounds really high to me. I wouldn’t think that many investors sold through agents because it would cut into the profit.
Anyway, we are probably going to continue working at a slow pace over the next couple of years. Then sell. I’m not desperate enough to dump the house at all costs. I just thought that it might be a win/win situation. But, it doesn’t sound like it.
Re: advice on selling my home to an investor - Posted by Heather
Posted by Heather on October 12, 2002 at 12:52:16:
I don’t fully understand the note part of it. Doesn’t the bank have the note? How could I sell the note? We have been in a situation where we have rented a house before when we had to relocate out of state. It was pretty painless. Our property management company ended up setting up a sale of the property with tenants to an investor who had to do a 1031 exchange. (So, I guess I have sold to an investor in a round about way even though the prop mgt co handled everything.) We might not be opposed to it again because it worked out ok for us. Could you elaborate on the note part? Please forgive my ignorance.
