Deal Break Down

General Real Estate Investing
1

Thought some folks would benefit from the numbers from a condo deal I am closing next week using a hard money lender.

Projected Profit

Appraisal as Repaired 56000
Purchase price 28000
Deposit -500
Points 3000
Inspection fees 200
Atty fees 595
Other lender fees 595
Prepaid interest 3 months 1050
Taxes 0
Repair escrow 2000
Other costs 300
Total costs 35240

Projected sale prce 56000
Commision 3360
Interest costs 3 months 1050
Insurance 285
Taxes 6 months 513.5
HOA dues 6 months 1002
Other remodel costs 1589
Title Policy ? 750
Other Closing costs 500
Total sales cost 9049
Gross Profit Estimate 12210

Estimated remodel costs

Carpet 889
Tile material 300
Tile labor 300
Stove 400
Dishwasher 300
Vent hood 50
Ref 400
Paint 200
Paint labor 300
Water heater 200
Misc 250

Total 3589

I hope this helps some of you figure a deal. It helped me decide to do it or not. When I first looked I said wow a $28,000 profit if I buy at $28,000 and sell for $56,000. If I only get $50,000 that will cut the profit in half. Will try to sell without Realtor for a few months with just a few signs and maybe an add or two. If does not sell in 3 to 4 months I will do a lease option deal.

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

2

ted,
did you do all the work yourself? and you are paying the mortgage on the condo until it sells? and you are not using a realtor correct?

thanks
Aaron

3

Thanks for the information, that is helpful. If I understand your figures, you are looking at $9,049 in total sales cost, is that pretty typical?

4

NYC Guy,

I will do the work myself but am still getting paid for labor. It all comes out in the wash so to speak but should not work for free. I could be doing something for someone else. I am paying a Realtor 6% to sell if I can not once it is remodeled and the seller is paying a Realtor too. I could get half that fee but I want the agent to bring me more deals. Sure enough, just got a call with 2 more houses. I am paying 3 months up front and figured 3 more months holding costs too. Also HOA dues and taxes for 6 months.

DDavis,

I did not total all the costs. The hard money costs are high and with the Realtor selling it the costs add up. If there is one thing I have learned in REI “ain’t nothin typical”. I just thought it may help for some to see a deal unfold.

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

5

Ted, This kind of break down on a deal is what I find very helpful. I would like to see more of this kinda thing being discussed if at all possible from you and the more experinced investors out there. Thanks.

A question I have for you is what was the listing price on this home and how did you actually get into this for 28k for it? Thanks, Joe.

6

It was a REO from a bank. It was listed at $29,900. It had an offer pending but not yet signed by the bank when I first looked at it. The Realtor did not want to take another until that one was accepted or rejected. It was accepted and the buyer eventually did not get a loan approved. The Realtor called the same day and told me I was next in line but it had to be close to the asking price. I offered $28,000. After the offer he told me that the other contract was exactly the same price. It only took a few days to get it accepted by the bank. I did my own inspections and ordered an appraisal. I already had the loan approved by my hard money lender subject to the appraisal. The appraisal came out fine and the HML agreed to lan $35,000 total. Should close Thursday.

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