I am closing on my first property on Tuesday and the anticipation has my wife in fits. She is a worried we are going to loose our skins on this deal and wants me to carpet with wrapping paper and redo the kitchen in Mills Pride (ick)
I just wanted to run the numbers by you and get your perspective to reasure her (and myself) As they say, if the Misses aint happy, no one is.
Neighborhood is trendy with a slew of fassionable bars and shopping with in walking distance. Most all of the homes are 55-90 years old where most have been updated and there is a high percentage of rentals.
The house is a 2bd/1br, 900sq ft, full basement, 2 car garage and fireplace. It has solid bones and the plaster is in great shape, but it needs a lot of updateing. Comps are 135k - 160k.
Purchasing the house for 94k with 3% concessions, no down payment, no points, stated loan at 7.75% budget for repairs are 20K and includes new furnace, waterheater, kitchen, bath, windows, siding and refinished hardwood floor.
We are aiming for the 160K mark in regards to quality of product and design and will probably list it for 150. Maple cabinets, solid surface counter, new appliances and all the fixings.
We are doing 90% of the work ourselves and have good connections with the furnace and windows. I have a lot of experience in home improvement and in most areas in MI I would be putting in the mills pride and american standard. But I believe this market warrent the upgrades.
Don’t skimp on the furnace, water heater or windows. If you get all energy efficient products your property will qualify as energy efficient. Buyers can get an EEM mortgage. It will allow more people to purchase the property because of a 2% DTI Stretch. You can also market the property as “energy efficient”, “with low utility costs”.
Bust your butts on getting the work done ASAP.
Get the bad boy back on the market before winter and market, market, market.
Furnace is 90%, windows are low-e, not sure about the water heater. Also updating electrical and plumbing. Not a tough job since its a ranch with a basement and a kitchen and 1 bath back to back.
I will be spending 4 nights a week there and devoting every weekend until done. Thank god for Congical visits.
Speaking of marketing, I was thinking of putting upa FSBO sign up about 2 weeks before finish to generate interest, but not show it til its completed. Is that wise?
Praying is good you also might want to think about marketing it as “Rent To own” and do a Lease Otion. Just remember to get a non refundable Option Fee. See the Sub2 and Lease Option forum. They have some great ideas too.
you also might want to think about marketing it as “Rent To own” and do a Lease Otion. Just remember to get a non refundable Option Fee. See the Sub2 and Lease Option forum. They have some great ideas too.