Am I doing this right?

Foreclosures, Short Sales, Tax Foreclosures
1

I am really new at this. I looked at some REO yesterday with a realtor.

Prop #1) 6/3 1/2 (4th started in basement), 3300 sq. ft. , needs roof, carpet, siding on upper (main level is brick,) interior drywall and paint, central air looks ancient, kitchen needs some work but seems intact, 2 baths need replacing, didn’t see any rotten wood elec seems good with the exception of needing some switches and light fixtures, windows need replacing, both garages need work, basement needs some paint and paneling, pool needs cleaning ( don’t know what else) and the fencing needs to be replaced. Executive home in great area not far from lake. Bank asking $239,900–realtor says that is the ARV. I think I am looking at $25,000 in repairs = MAO of $142,900 with an offer of $137,000. Have I missed anything, do my figures look right?
Prop #2) REO, Asking $55,900 Realtor says ARV is mid to high $60’s in that area ARV. Block house Needs gutting and complete redo, bank reroofed over rotten wood on house as well as garage. Electrical needs upgrading from fuse box to circuit, not sure of wiring. I think I am looking at $20,000 in repairs, I used $67,000 for ARV which gives me a MAO of $26,900 my offer is $21,900. Have I missed anything? Do the figures look right? ???

EdensGate

2

Holding costs during the rehab should be accounted for…the mortgage, the taxes, the insurance, the utilities keep going for the duration of the project…if you are doing this part-time, double the duration that you expect.

Keith

3

Isn’t the holding and other costs accounted for in the 30% figure?

EdensGate

4

I don’t know because you’ve no explanation of your figures…you don’t list a “30% figure” in your explanation…

Keith

5

Sorry, I was trying to save space. Realtor says ARV is $239,900 which is also the asking. I used 70%of that figure which was $167,900 and then took away the $25,000 for repairs which gave me a MAO of $142,900. I then dropped it $5000 which gave me $137,900 which I rounded to $137,000 because Ron says NEVER pay MAO.

EdensGate