need help on first possible flip!

Bird Dogs, Wholesaling
1

Ok, i have never invested in real estate before so i need some advise/help/comments!

There is a property that is going on foreclosure for $107k, and $3k owed in property taxes. Similar houses in the neighborhood are selling for $160k (minimum) and there are several on the market now for $170k-$180k.

The property is overall in descent condition and i don’t imagine it will cost over $1k to clean up and get it ready for a sale. Most of the stuff has been moved out the residence so i don’t believe i’ll have a squatter problem. I have a hard money lender setup to finance it after the foreclosure auction, and i have enough cash to pay the required deposit (5%).

Here’s my plan:

Purchase house at foreclosure ($107k), pay taxes ($3k), fix property up ($1k). List property with real estate company at $155k (under market).

Costs:
107k - purchase
3k - taxes
2.5k - finance charges (hard money lender)
9.3k - real estate fee

Total costs - $121,800
Potential profit - $33,200

I believe this leaves enough buffer in case the repairs are more expensive and any extra interest payments made to the lender.

Is this a good plan? are there other/better ways about doing this deal?

Thanks in advance!

2

By the numbers it sounds good

3

do it quick…really quick…the comps will be down to your 155k in the next 12-18 months

i wouldnt do it unless i had my buyer all lined up…double close…

my 2 cents

Robert A. Doncaster, Jr.
Import/Export Entrepreneur & Investor
*** DO YOUR HOMEWORK ***

Chicago Illinois USA
& sometimes Salzburg, Austria

4

When you say the propert is going on foreclosure, do you mean you are planning on purshasing at the sherriff’s sale (a.k.a. auction)? If this is the case, were you able to already visit and go inside the property? Just curious.

5

Yeah it was at auction. I am unable to actually go inside the property, so the repair estimate is done by peering in the windows and seeing that there is no physical damage to anything (the house was built less then 3 years ago).

6

What are you doing for that $1K? I would definitely have a higher repair budget. There are always surprises.

7

What is the $9.3K real estate fee?
$2.5K fee for HML is incredibly low.

Also, sounds like you don’t think you can get into the property, HML might require it.

8

Repair: i was budgeting for paint & landscaping

Real Estate Fee: 6% realtor cost to sell the property

Hard Money: yeah, i hadn’t factored a lot into it. The 2.5k was only the origination fee