found first house, seller will take 170k; fmv 235k; what now?
I’m new at this too. What kind of repairs are needed? What do you plan on doing with the property? what are the comps in the area? These are some questions that I would want answered before I did anything.
15k repairs, would love to get loan as investment maybe thru hardmoney lender or standard investment purchase loan & do some work & repairs and flip at market value, but thinking about the flip to wholesaler for a fee, and comps suggest the 225-245k range.
If your 15k figure is right, then sure go for it. If comps are 225 to 245 i’d list yours at 215 or maybe even 210 for a quick sale. When you get greedy is probably when you’re going to end up loosing. Make sure you don’t over do things as far as renovation wise.
do work and resale -vs- wholesale it for fee ?
I’m gonna go on a whim and advise to take fee over rehabbing…why assume the risk this early in the game?
A few things here:
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Hard money is not going to be an option here. If you buy it for 170k, rehab is 15k, and ARV is 225k, you’re only at 82% LTV. With an ARV of 245k your LTV is 76%. Most HMLs won’t go over 65% for a first-timer, which means you’d need to get the property between $131k and $144k.
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You say you’re thinking about flipping it to a wholesaler for a fee. In that scenario you would be the wholesaler and you’d flip it to a rehabber (just helping you with terminology so everyone knows what you’re saying). However, most rehabbers wouldn’t pay you for this deal because it’s not that great of a deal.
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And 813Equities, just FYI, the phrase is “go out on a limb.”
Man, I seriously stared at that for about 5 mins thinking it didn’t look right, haha. Thanks. 
Man, some of these forums are rough. I guess I’ve been spoiled with good old fashioned Southern courtesy.:-*
I going to agree with rballard that this isn’t the greatest deal. You should be into it for about 150K. Not that you can’t make money with it, but its going to be very tight. Wholesaling it to a wholesaler or a rehabber is not a viable exit strategy, so you should crunch numbers with some other type of exit strategy (i.e. rehabbing it yourself, lease option, etc.)
If this is one of your first deals I would suggest that you do not try rehabbing it yourself. With so little experience, rehabbing is going to be tough and there is too big of a chance that something can go wrong.
I would try and wholesale the property. Try and get the price as low as possible and since it needs some repair costs use that to your advantage. Push the limits here to get that purchase price down.
As everyone else said, there isn’t much room in the deal but the worst case scenario with you trying to wholesale it is: you don’t complete the deal but you learn how to negotiate with the seller, you learn about contracts and you meet a few new investors. You can’t win 100% of the time but if you learn from it, you will succeed in the future.
Good luck!
Brandon
Make sure your comps are accurate. If the seller believes that 15k for repairs is real, then I’m thinking 200-215 is a more accurate comparison. Just my opinion.
Why are they selling for 170? Do you know their underlying mortgae amount?