Posted by Jim Kennedy - Houston, TX on November 24, 2000 at 23:39:01:
Arthur,
If your numbers are correct, this is a good deal. Go for it!!
Best of Success!!
Jim Kennedy,
Houston, TX
Private Money for Rehab question - Posted by Arthur Montano
Posted by Arthur Montano on November 24, 2000 at 23:05:57:
Found a 3/1 wood frame 1450 sq. ft. that needs major rehab. (roof & cental a/c) located on 1 acre wooded lot, cleared w/trees. Had it appraised after fixup for $68,000. Cost of house $26,000. Rehab approx $18,000. Have a lender that will finance for 5 points and 15% interest. Belive that if repaired to excellent condition could get $79,900. Need an opinion. Thanks.
What do you mean, you need an opinion? - Posted by Beldorian
Posted by Beldorian on November 25, 2000 at 01:21:20:
Arthur,
It concerns me that you are asking for an opinion on such an obviously good deal.
Typically, in my neck o’ the woods, the criteria is usually 30% below ARV minus repairs. I have done them as skinny as 20% below ARV minus repairs. Your numbers, even at the 68k figure, rehab numbers and points worked in my offer would have been between 26-28k. You are in a very good position.
What is your real concern? Please forgive me because I don’t know how much experience you have in doing deals…But, my question to you would be, do you have an exit strategy? Trust me, if you don’t, get one… One of my early deals – I bought a mobile home for $500 and assumed the land it was on for 118/mo. I had no exit strategy and ended up holding the thing for a lot longer than I should have. That was one of my first deals and a very expensive lesson. Now, it worked out okay, but make sure that you know what you are going to be doing to make your money before you get into the deal.
Best of success!