Help with a potential Option

General Real Estate Investing
1

I am doing some work for a guy who needs to sell his house. House was purchased in 06 as a two bed for $190k by his father who put 90k down. Since then the father passed and the house is deeded to the son who I am dealing with. The house became vacant last august and the seller has no desire to finish it to get it sold. Approx. $90k is owed on the mortgage and the seller owes his mother $15k and has a few thousand in the house. He was offered $125k from the across the street in feb. and he said it was to low for him, he said he might of considered $135k.

The house is assessed as a two bed for $171 and zillow is at $155k. Seller said he was going to list with a realtor for $154k as-is. House is in move in condition but to get retail value it needs a kitchen and bath, and can easily add a toilet and sink on first floor. Also the seller and his father made a third bedroom on first floor. ARV is $185k. there is a short sale on same road at $180k and a bank owned i believe for $169k.

I am thinking my best bet would be to get a option to buy for 30-60 days for $135k-$140k and list on mls for a O-O at $159k.

How do I structure this as to who pays closing costs and buyer agent fee?

Please give advise and thoughts!

Thanks all!! :help

2

Hi,

You must be one of those new fangled "Retail Real Estate Investors" as those of us old fashioned "Old School" investors don't pay more than 70% of retail for a move in condition, updated, pristine condition home!!!

So let’s review, those of us who actually want to make money and are old fashioned so let’s pretend this property is worth $165k

$165,000 FMV / ARV
$ 49,500 30% Old School Money Making Discount for the Tried and True Investor who is not being _________ !!! (Fill in blank with fitting word or words)
$115,500 The very most us Old School Investors would pay for this old house!!!
Repair, Rehab, Construction, Remodel, Re-Design cost’s which include overhead and carrying cost’s!
$ 15,000 A cheap kitchen and bath!!!

$100,500 The very most I would pay for this property and still make money on it!!!

                    GR
3

NO I’m not one of those new fangled investors…

FMV/ARV is $175k -$185k easy, I just figured I could get a option at say $135k and assign it for $145k to a owner occupant or maybe do a CA. I believe all the buyers that will be looking at the other two listed houses that are both listed for more would definetly be interested in this house.

Just looking for thoughts on how to approach this…