First deal…fire damaged…am I nuts? - Posted by JTodd
Posted by JTodd on July 21, 2001 at 15:57:39:
Here’s the deal…
The owner of this house owns it free & clear. Had a buyer lined up and two days before closing the house suffered a fire. Was going to sell for $108,000. It’s a three family, but the first floor can be zoned for commercial. I spoke to the woman who was going to buy it before it caught fire, and she expressed an interest in it, if it were fixed up. She would put her store on the first floor, live on the second, and rent the third.
The current owner lost heart, and does not have the money or time to fix it up. Was asking $66,000. I got him down to $55,000 cash, but think I could still get him lower. He has received his check from the ins. co.
Comps in the area go from $110,000 to $120,000. When I say comps, they are three families, not w/ a commercial zoning on the first floor.
Being new to this, I don’t want to get into retailing this one. I would just flip it to someone more experienced who would do the rehab.
My question is:
1.) Is there enough spread here to make rehab, holding, and my small cut worth a deal?
2.) How do I find out more about a 203K, and is it advisable to sell it on this type of loan in this case?
3.) How else might I structure this deal?
Thank you all for your help.