How to structure deal - Posted by JJ-Dallas

Posted by waynepdx on July 13, 2002 at 20:49:57:

I would offer 30k all cash. If they dont take it then NEXT

How to structure deal - Posted by JJ-Dallas

Posted by JJ-Dallas on July 13, 2002 at 03:25:43:

I have a deal that my contractor told me about from a realtor friend of his. I totally trust this contractor he has just completed some work for me on a rental property that he did an excellent job at a good price with no headaches. He worked on my project everyday and even worked July 4th can you imagine that.

Here’s the deal:

Burn Out 3bdr 2 1/2 bath 1410 sq. ft. 2 car g duplex home (looks like a house with upstairs nice)
needs about 15k of repair work
appraises about 82k
owner will sell for what she owes 58k about 70.7 % LTV
owner says she will give 8k to buyer for repairs.

My question I have a private lender that will do 70% LTV but how could I get the other 7 k I need for the rehab ?

The realtor wants $2,500 for refferal fee he doesn’t have contract on it but I have no money.

Note: The owner is only giving 8k and the repairs equal 15k; and I have no money.

too skinny in my opinion - Posted by michaela/GA

Posted by michaela/GA on July 13, 2002 at 08:33:56:

you pay 58k ans seller will provide 8k for repairs.
i have yet to meet the rehabber, that is able to stick exactly to their budget. it’s the little things, that blow it: landscaping, knobs on cabinets etc, so let’s say you spend 18k fixing the property. and let’s say the arv is 82. what happens if an agent brings you a buyer? even if they pay you full asking price, they’ll probably ask you to pay 2% closing cost, then 3% to the agent. leaves you about 10k - and then splitting that with the contractor? what if you don’t get full price offers? what if it sits there for a while (this doesn’t even include 6 months holding costs or any kind of closing costs, points, if you have to borrow)
just my opinion

my 2 cents - Posted by Donald

Posted by Donald on July 13, 2002 at 05:04:05:


1…Contact owner and look at the inside of the property.
2…Forget the RE broker (as of now), let the seller deal with the broker later about his/her ‘referral fee’. Which, BTW, is too d$mn high! $200 or $300 cash is about right. :o)
3…Who says it will ‘appraise out’ at $82,000?
4…Why is she selling?
5…Who will pay escrow closing costs?
6…Your telling us you can buy a ‘fixer’ with a ARV of 82k for 50k?
7…Can you assume her mortgage and she cut you a check for $8,000 at closing?
Just some questions—my 2 cents

Re: How to structure deal - Posted by Matt (MPD) IL

Posted by Matt (MPD) IL on July 13, 2002 at 04:37:22:

Why not partner up with the contractor? You bring the financing to the table and have him take care of the necessary repairs. Sounds like both of you could walk away with a pretty good return as well as building up what could turn out to be a match made in heaven.

Matt Yohnk
MPD Investments Inc.

Re: my 2 cents - Posted by JJ-Dallas

Posted by JJ-Dallas on July 13, 2002 at 13:04:33:

thanks for your response
Answers question 2 thru 7:

  1. I check the comps my self and 82 would be about the average.
  2. Realtor says she wants to move to another area and don’t want it since it caught on fire.
  3. Then only thing my private lender charges is an appraisel report.
  4. Yes that is correct (‘fixer’ with a ARV of 82k for 50k
  5. The realtor says she is open for someone to take over payments as well and give them 8k ( I am going to try and talk with her today).

get a better price - Posted by Winston,Ct

Posted by Winston,Ct on July 13, 2002 at 11:32:40:

Seems around $40k is your offer point. Remember this guy already got paid insurance proceeds, probably more than 15k.