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).
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!