where to go now? - Posted by adam

Real Estate Investing
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Posted by Dave K on December 01, 2005 at 16:09:22:

Adam,

If it’s really worth 50,000 after 5,000 in repairs you need to get it cheaper than 30,000. How do you know it’s worth 50,000? The formula for houses in that price range is ARV (AFTER REPAIRED VALUE) - 17,000 (Holding costs) - repairs = MAO(Maximum allowable offer) Never pay MAO. That’s the break even price. The MAO is 28,000 according to your numbers. You don’t want to Lease Option because the tenants you’ll get for a 50,000 house would be undesirable. I think this is a “flip” only deal. That’s if you get it at a good price. This guy doesn’t seem motivated. Pass.

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where to go now? - Posted by adam

Posted by adam on December 01, 2005 at 15:43:38:

hey guys i have a deal im working on but im not sure which direction to take it. it is a pretty ugly house lol in a not so nice neighborhood. the guy owns it free and clear. he paid 22k and is asking 30k. it needs the siding he bought put up and a little sugar coating on the inside. after about 5k or so in repairs it is worth around 50k.

im not sure if i should try a lease option, owner financing, or cash offer. any input would be greatly appreciated!