Posted by steve (tn) on February 21, 2003 at 24:17:02:
I’m about to make my first deal. The rehabbed value is from $160k-$180k. It’s gonna take from $20k-$40k to fix it up. (depending on just how nice I wanna make it) I can get it for around $90k. Should I flip it to another invester since it’s the first time or should I go for it? I’m scared of holding it for several months. I have some money but I don’t have any experience. I don’t really want to be a landlord. A week ago my plan was to bird dog until I got a little more “learned”, as they say. Now I’m not sure. It needs central air. No big deal right? Just pay the man to come put it in. It’s ugly inside. Needs paint and carpet (or should I refinish the pine floors that are waiting under that '70’s shag?) Maybe knock up a wall to open up the kitchen. I don’t know. I’ve never picked up a hammer. It’s my first time out. Flip it? Fix it? Any suggestions?
Posted by steve (tn) on February 22, 2003 at 09:06:36:
Thanks so much for the comments. The reason the range of the rehabbing expences is so broad is because of the different approach possibilities. You could add a bath upstairs and make a nice master suite. You could totally redo the kitchen. You could add a deck in back. Or you could just carpet, paint and add central air. Some people are really doing amazing things with some of these old houses in this neighborhood. I filled out a rehab worksheet (provided by my local investers club) to estimate cost. It came out around $23k. I am meating with a real estate attorney next week to dicuss the contracts that I have. I do want to make sure I have a good out. The contract that I have says “subject to buyers further inspection”, but I would rather not get out unless there is something really wrong with the house that I’ve missed. I think it’s a really good deal. But I think the feedback I’m getting is good. I should flip this one to another invester and then watch what he (or she) does and see what happens. There’s no need to get greedy yet. There will be other deals, right? Thanks again for the feedback.
Before you buy, tie it up subject to an inspection. Find a local contractor and get a bid for the job, a no more than estimate. Find out the true ARV. About 160k-180k means 150k in my book,which after 50k in rehab leaves 10k for marketing and agency fees and errors and profit. You make money when you buy, and you should have an idea of how much profit you will realize in a worst case scenario and work from there. Information (solid information) is POWER>
Posted by Kristine-CA on February 22, 2003 at 01:02:47:
Steve: why don’t you market the property (after you have it under contract) to flip to another investor and see how that goes. You’ll learn alot about what other investor/rehabbers think is a deal and what they buy. Then, if you sell it, of course keep on eye on what the rehabber does and what he sells it for.
Maybe the week after next you could tackle a rehab. Sincerely, Kristine
Sincerely, Kristine