Newbie First Deal Please Help!!! - Posted by Travis(MI)

Real Estate Investing
1

Posted by Travis(MI) on October 08, 2001 at 16:59:53:

Brian,
You are correct I’d actually be taking out 47 by means of a conventional loan. To answer you questions:

  1. The value of the home once the repairs are done would be in the range of $65-$69K in keeping in line with the neighborhood and similiar housing.
  2. My exit strategy is to rent the place out or possibly lease option it.
  3. I planned on hiring the work done from a contractor and was wonder if my estimates were inline with what others thought.

Travis

2

Newbie First Deal Please Help!!! - Posted by Travis(MI)

Posted by Travis(MI) on October 08, 2001 at 09:19:49:

Hello Everyone
I’m making my first offer I just wanted to run the details by you. I found a 3 bedroom home, owner is asking $65,900 but the home has been on the market for 4 to 5 months now and looks to need a large amount of repair. I don’t plan on doing repairs myself and am curious if my numbers are correct for repairs any input would be appreciated. The home is already rented for $650/month but I feel that I’ll have to have renter move out inorder to quickly make repairs listed below. Area is close to schools and currently produces around $700 to $750 a month.

New Roof $3000
New Flooring $2000
New Porch $3000
New Siding $3000
New Heater and Duct work $1000
New Electric Upgrade 1940’s home $1000
Total:$13,000

I think the owner is way overpriced and the realestate agent thought I should be around the $40,000 range but I’m thinking of offering $33,800 by the way of a conventional loan that’s based solely on rent income with only closing cost of my own pocket. Any assistance you can offer is much appreciated.

Thanks in advance
Travis

3

more details needed - Posted by Brian M. Powers(MI)

Posted by Brian M. Powers(MI) on October 08, 2001 at 11:02:57:

Travis:

I think we’ll need a little more info:
you are offering $34K and the place will need $13K in repairs. So you are in for $47K in costs.

  1. what is the value of the home once these repairs are done?
  2. what is your exit strategy?
    a. are you going to flip it? if so do you have someone lined up to flip it to? does the deal meet their requirements?
    b. are you going to rent the place out?
    c. sell it on a Lease-option?

What do you mean by “I don’t plan on doing the repairs myself”? Do you mean you won’t be physically doing them and you will be paying somebody to do them at a cost of $13K; or do you mean you will sell the place and your buyer will be doing the repairs?

BMP