Are these deals?

I’ve taken a few courses and read lots. Need some feedback cuz I haven’t bought anything yet. I’ve found two properties in New Orleans that look good to me, but I’m unsure.

  1. a 2/1 2/1 fixer for $220,000. Needs bathrooms and kitchen upgrades approx 30-40K can be resold for approx $380,000
    What are the pitfalls? Does it sound good?

A bank owned after foreclosure dpulex they want offer in the $300.000’s. Very large with pool and off street pking ( a BIG deal here) Repairs approx $30-40K could be resold after for approx $475,000.

Feed back MUCH appreciated. Where should I look for money for these deals? I own my own condo and have small downpayment (12,000) approx.

Howdy Kathrynm:

Without knowing your market it is hard to tell if you have good deals or not. The numbers sound great as long as the sales price when you sell is close to what you quoted. A rule of thumb a lot of rehab investors use if 70% of the rehab value for the purchase price and fix up money combined. That large of an amount is a bit spooky for your first deal. Your carrying costs are going to be at least $1500 per month and probably closer to $2000 just for interest. Find out how fast property in the area is selling once fixed up. Unless you have excellent credit and a great history of doing deals you will need to focus on a money partner or a hard money lender. The going rate if 15% interest and 5 to 10 points for that type loan. There is an area here on this board listing HML’s nationwide but I do not know about your area.

Hope this helps some.

Good luck and thank you,
Ted P. Stokely Jr
11505 Sw Oaks
Austin, Texas 78737
512-301-9171 home
512-587-6177 mobile