Tina,
why don’t you offer your friend a base amount, do the repairs and then sell it at retail and split the profit with her above your base amount. EX: Offer her the 40K them do the repairs while she pays the insurance and taxes etc… You market and sell the house at full retail. The two of you split the net profit. I think Ron was trying to say that you need to use your knowledge to help people while still making a profit. I understand you are looking at this as a business. But sometimes not everything is business. If you can help someone out especially a friend and still make some money is a great opportunity in my eyes. Remember this is a people business. Bricks and mortar is just what we sell.
I have a friend that is selling her property. From what I gather she is a motivated seller (i.e., she needs the money to pay off debts). It’s a 5 acre farm in southern IL that has a pond. 3BR/1BA. It’s definitely a fixer-upper. Needs septic tank and a new floor, the ceiling could use some work too. I’ve been to the house several times over the past few years and it really is beautiful property. The FMV for properties in this area usually run for about 60k to 70k. She is asking for 40k. She also owns the property free and clear. How can I help my friend and still make a little bit of a profit for myself?
With friends like you, your “friend” does not need enemies.
Why don’t you just give her free advice on how to maximize what she can get for the property? Tell her about owner-carryback, lease-options, and the like.
Stop and ask how you would like to be in her position and have some “friend” trying to make a big profit from your situation.
Get a septic engineer out there and get an estimate on that. I bought some land a few years ago, and I called out a septic engineer before I purchased, and was told it would cost ~$19k to put a field in (problem with rocks), I got a quote more recently for $11,500 for a field on another property. A friend of mine has just had to pay $15k in repairs to his. Get a good handle on costs before you move forward, your $20k-$30k profit could dissapear or turn negative pretty quickly if there are major problems.
If the costs are reasonable, and the properties in the area were selling relatively quickly, I’d buy it.
my suggestion to you would be to find out what those debts are and how much they are. find out what the payments are and then find out who they are to and maybe try to handle this deal frmo that angle. since the debts are her trouble you need to figure out how to releive those debts and then phase the house into that setup. with a free and clear property you have multiple choices of financing without banks.
worry about the debts as your number one concern. fix the debts and you have alot of room to play with the property and the owner since she is your friend. i personally dont like doing business with friends, but for 20-30K, ill make an exepction.
Sorry to come off sounding so harsh but I really resent that enemies remark. A house is a house is a house, or so I keep reading here. Selling or buying a house is a business, my friend understands this. Otherwise, she wouldn’t have asked me to help her. I’m not looking for the big payoff from her situation as she will be using most of that money to pay off her debts. I’m sorry if I came off as sounding that way in my earlier post. That was not my intention. I am determined tho, to get her the best price for her home. “Be a problem solver.” Isn’t that the motto?