Newbie first deal needs advise - Posted by Max

import · July 18, 2004, 8:42am

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import · July 18, 2004, 8:42am

Posted by Max on July 18, 2004 at 08:42:30:

Live in Florida… tampabay area

found a property I want ot make an offer. property was condemed
The seller is asking for 49k Comps run 65-70k
Rehab 10k

I need some advise on the numbers offer.
since the property was condemed what should I look for as red signs,
Will a condemed property be a good first deal for a newbie?
are there any special requirememts i.e from the county that I will need to go through to begin the rehab.

any information would be greatly appreciated

import · July 18, 2004, 6:48pm

Re: Newbie first deal needs advise - Posted by Robert O

Posted by Robert O on July 18, 2004 at 18:48:11:

Max, get a contractor with good references to go with you and give you an estimate, even if you are gonna do the work yourself. 10k sounds WAY TOO LOW for a house that is condemned. I just put 15k into a house that only needed cosmetic repairs, (paint, sod, front door, garage door, carpet, ceramic, minor plumbing, minor electric, landscaping etc etc etc.) Its good to be eager but this sounds like you should proceed very cautiously especially for your first time. Good Luck

import · July 18, 2004, 9:17am

Re: Newbie first deal needs advise - Posted by Randy (SD)

Posted by Randy (SD) on July 18, 2004 at 09:17:38:

Based on the limited information provided ? Pass?

Not a candidate for a first timer. First you?re buying at 75% LTV BEFORE the $10k rehab 91% with rehab. Second why was the property condemned? Inspectors don?t condemn buildings for minor violations, how did you arrive at the $10k rehab figure, is this your estimation or a contractor bid?

import · July 18, 2004, 5:36pm

Is Buyin 75% LTV always a bad deal? - Posted by Jeff S

Posted by Jeff S on July 18, 2004 at 17:36:37:

Why is bying %75 LTV a bad deal, Im a newbie also as you can probably tell fom my question

import · July 18, 2004, 9:38am

Re: Newbie first deal needs advise - Posted by Max

Posted by Max on July 18, 2004 at 09:38:07:

I was going to make an offer of 30k Max. If the seller is willing to take the 30k do you think this will be a deal.

10k my estimate I will be doing most of the work.
how do I find out the reason why the property was condemned?
greatly appreciate all the advise

import · November 18, 2004, 7:44pm

Re: Is Buyin 75% LTV always a bad deal? - Posted by Edie Dick

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import · July 19, 2004, 9:00am

Re: Is Buyin 75% LTV always a bad deal? - Posted by Randy (SD)

Posted by Randy (SD) on July 19, 2004 at 09:00:32:

First of all Max is admittedly a newbie and considering a very small deal with a potential 10% profit on a $65 K. property combined with the fact that this property is condemned which means his $10 K. rehab cost could increase significantly, additionally he hasn’t calculated closing costs, holding cost or costs of sale after rehab. 10% profit on a $200 K. property might be worth it, IMHO 10% profit on $65 K. property is not. It’s all a matter of risk and reward and “based on the limited information provided” the risk far exceeds the reward.

import · July 18, 2004, 6:02pm

Re: Is Buyin 75% LTV always a bad deal? - Posted by Junaid

Posted by Junaid on July 18, 2004 at 18:02:55:

If you are doing rehab then you should have some profit.
10% of the value will be used up in closing cost, holding cost during rehab (tax, insurance, utilities, etc), advertisement when you sell (or for tanent).
If you are doing all this work then atleast 20% should be your profit.
If you buy (70%LTV - repair), then at the end you will have 20% profit.
Otherwise just go and buy property with no repair.

import · July 19, 2004, 9:16am

Re: Newbie first deal needs advise - Posted by e.eka

Posted by e.eka on July 19, 2004 at 09:16:44:

Go to the people who condemned it…most likely the city housing authority etc. Get yourself a reputable contractor and go through the place. If you can’t figure out how much it would cost for a rehab, then you don’t know where your profit will lie. No body should do business that way. I suggest you pass, but you can still do some due dilligence to get some experience. Good luck!