How fast do you think you can fix up and sell? Maybe you have 10K in equity if all goes right but you will have holding costs, selling costs, fix up and over run costs. Not only that, a loan at 10%!! It looks like a pass to me.
i’m just getting started. I actually posted last week regarding bandit signs. I finally got the courage (thanks to the people that responded) and spent last friday putting out bandit signs. I have had 2 calls, one of them being this situation.
here is the deal…
a recent widow that fell down the stairs and now needs a hip replacement. She is now unable to work for the next 3 months. She lives in a mobile home that needs her metal roof replaced. she got estimates for the roof and that will run $5,800. She has a rental house. The house is in a nice neighboorhood, is a 3 bedroom, 2 bath. Its a frame house and 1/2 acre lot with lake access. Houses are going from $105-$250k. I think this house is worth $105k. This lady owes $79,999. The house needs about $15k worth of work. The mortage is assumable at 10%. She is willing to do a lease option, or hold a note- but she needs $82k out of it.
I offered $79,999, and to pay the closing costs. Am i an idiot? should i do this deal? if so, what is the best way to go here.
all thoughts are welcome and would be most appreciated.
I’m concerned here. You said: “The house is in a nice neighboorhood, is a 3 bedroom, 2 bath. Its a frame house and 1/2 acre lot with lake access. Houses are going from $105-$250k. I think this house is worth $105k.” Now you are citing a very, very wide range of prices there. If you have pegged the value correctly, I think you might try doing what either Bill (NY) or Lloyd Cook (CA) say. However, I worry that you may be undervaluing the property.
If you are not very certain of your valuation, I recommend that you immediately get a firmer figure for the house. If it is worth, say $135K, there may be room here to make several thousand dollars, even maybe tens of thousands of dollars.
I’d recommend that you talk to some real estate agents, get some comps for the property, figure out the value within a range of about $10K to 15K. Since you don’t say where you are, it is hard to know what source of comps is easy to get where you are. You might do an archive search on “comps” or “comparables” and see what other people find handy.
Posted by Bill (NY) on April 12, 2002 at 09:59:43:
I’m no expert, but being a contractor myself, I would certainly consider doing a roof job in trade for the down payment of a rental. Maybe get $1,000 from the lady and have contractor repair the roof (cheaper than $5,800). Assign your purchase contract to contractor for roof job.
You get $1,000 for your trouble, lady gets roof fixed for a grand (even on an IOU or note), contractor gets rental for cost of roof materials and his labor plus payments. You look like hero. Could even assign to contractor for a grand plus the roof and the lady pays zip.
This is just my creative mind at work. I’m sure I’ll get blasted if I’m wrong, but, based on what I’m learning on this site anything is possible. Just give it a shot.