I heard an assignment of contract can be done on a home with the right listing price and may be in good condition as well. How are the figures done.
For instance I looked at an estate house listed at $139,900.00 The resale price was $177.000.00 and maybe more. House just needed new carpet, this cheap plastic paneling tore off, it was tacked onto wall. It has lovely new windows, and some shelfs tore off of the walls, new paint and kitchen cabinets at about $2,500.00 or a little more say. 2282 sq. feet altogether and one small bedroom with wall paper that needed tore off.
This same house size etc., was reselling at $208,00.00 which blew me away. This house may go for more than $177,000.00 too. Any comment on this?
bjean
You really need to nail down what the market value is for each home you look at. You do this by looking at the recent comparable sales in the neighborhood. Once you have a good idea of what the house is worth, then you can start to structure your offer. Call around to some investors in your area and ask them what type of discounts they are looking to get on homes in that particular neighborhood. After you get this info, you will want to subtract the repairs, and your wholesale profit, to come up with your offer…
So, say you determine that the house is worth 100k, needs 20k in repairs, and you have an investor who is buying in that area for 70% of market value. You would take 100k x 70%= 70,000-20,000 (repairs)= 50,000. Then subtract your wholesale fee, say 8k= $42,000. So, $42,000 would be your maximum offer if you want to make an 8k assignment fee on a home worth 100k that needs 20k in repair, where you have an investor looking to get in at 70 cents on the dollar…
This all becomes a lot easier once you start to learn your market and become familiar with home values in each different neighborhood. It takes some work, but is well worth it in the long run.
Hope that answered your question.
Steph :cool
Yeah, that all made sense to me. The comps on this house showed with the same close sq. ft. etc., selling for around $177,000 and one, again with same sq. footage, etc., selling for $208,000.00. So I thought stay in the middle ground for comps, since most, just recently, did sell at the $177,000.00 mark rather than JUST THE ONE AT $208,000.00. So I see what you are saying about the comps. Thanks so much. I got it!
Bjean
When you say was selling do you mean was asking $208k or selling for $208k, there is a huge difference. People can ask anything that they want for a home. I have seen many rookies lose their shirt because they are basing offers on area asking prices rather than very recent sales prices.