Posted by Ron on January 03, 2003 at 23:30:29:
Ron,
Thanks for your feedback, and for clarification, what I was labeling as FMV was in fact the county assesed fair market value for tax purposes, and comps were recent sales of similar properties in those areas. Thanks again.
Possibilities for 1st deal…what do you think? - Posted by Ron
Posted by Ron on January 03, 2003 at 19:55:50:
I have a couple possibilities I have found for a first deal or two and am looking for advice. Are these a good first attempt…
#1 small condo that will be going up for auction soon,
note in the amount of 41k, FMV of 55k, with recent
comps in the same development of 65-70k. Is this
enough equity to be attractive for a flip to another
investor?
#2 duplex also going up for auction soon, note of roughly
101k, FMV of 128k, with recent comps of 146-158k.
#3 2 year old town house going up for auction, note of
227k, FMV of 207k, with recent comps of 290k.
and this last one is one that I haven’t quite figured out yet and any insight would be appreciated…
#4 I’m assuming this is a second mortgage on this SFH,
note of 23k, FMV of 190k, with recent comps of 215-235k.
How would this work? if this is a second mortgage,
would there be any benefit to taking ownership of it?
Again, these are just some things I ran across today and the above is all the info I have at this time. As a beginner looking for a first deal, am I on the right track? Do any of these look more promising than others? Just looking for some advice and which if any of these might be appealing to another investor. Thanks in advance for your help.
Ron
Re: Possibilities for 1st deal. - Posted by michaela-ATL
Posted by michaela-ATL on January 04, 2003 at 07:56:47:
Ron,
there is a very important ingredient missing: What kind of work do these properties need?
If you take a 2/1 for sale for 100k, in perfect condition and the arv (after repair value) is 150k, then that sounds like a great deal.
If that same property need 25k of repair, then i probably wouldn’t touch it.
If i drive around in the neighborhood and see it’s full of families, then the 2/1 value is probably low, because the house it too small for a family. So, if i can spend 40k to add on and renovate and sell it for 22k as a 3/2, then that might become an attractive deal again.
A lot of factors to look at
michaela
What I think ? - Posted by Heather -Tx
Posted by Heather -Tx on January 04, 2003 at 24:06:07:
Something I have learned the hard way ? Never ever pay much attention to the tax assessed Values. They, at least in My neighborhoods don’t mean jack worth the paper they are written on.
I tried to look at those when I started out, but only took me a couple weeks to realize that that are usally VERY much under what houses in the neighborhoods sell for.
Hope this helps,
Heather-Tx
I Think . . . - Posted by Ronald * Starr (in No CA)
Posted by Ronald * Starr (in No CA) on January 03, 2003 at 21:21:39:
Ron------------
Nice first name, by the way.
I am confused. You give a figure for each property that you are labling “FMV.” Then you give a pair of figures that you are labling “comps.” But the “FMV” and the “Comps” figures do not match up. Usually the “fair market value,” often abbreviated FMV, is in within the range of values for recent sales of nearby similar properties, called “comparable sales,” “comparables” or comps. You numbers don’t match up. Could it be that you are using some other number and labeling it as “FMV?” Such as some number from the county assessor’s office?
I’d recommend that you learn the market values in the areas where you want to invest, so you are not relying on some mysterious number from the assessor’s office, if that is what you are doing.
Try to estimate the values from real sales in the area of similar houses.
Divide the possible purchase price by the estimate that you have of the probable sales price (FMV or figure from studying the comps). This ratio will get you closer to being able to figure out what is a good deal and what is not.
Then get out and talk to the potential buyers and find out from them what they need in a deal to make it interesting to them. Then compare the figures you get for the house and the numbers they give you. You should then be able to answer your own question. You see, I could not tell you what would interest the investors where you are. I don’t know them. If you were to offer me properties, please make the prices no more than 1/2 of FMV. Well, maybe 60% if it is a nice property in a nice neighborhood. But, there are a lot of other investors whose criteria are not going to be that tough to meet.
Good Investing***********Ron Starr*************
oops - meant 220k nt - Posted by michaela-ATL
Posted by michaela-ATL on January 04, 2003 at 09:01:42:
…