Hello everyone,
I’m looking for feedback on the upside (and downside) you all may see in the deal I’m detailing below.
House is in foreclosure and is listed at 90,000, as is. Comps in the area come in at 89k, 104k, 121k, and 133k.
Repairs needed–
Flooring/carpet throughout all 1120 sq ft.
Replace furnace
Some minor drywall repairs
10 feet of kitchen cabinets and countertop with sink
Completely paint interior
Update/rehab two 4x8 bathrooms
Clean up landscaping
Strip and paint exterior windows.
I’m estimating 20k maximum for repair bills and think it may be about half that amount. The house seems solid structurally. It’s just ugly.
My questions are–
What would you think a reasonable offer would be?
What would you price it for a flip?
Thanks for your help.
naperbill
Hi Naperbill,
I think some more details will paint a better picture:
What do you mean the “house is ‘in’ foreclosure?” Is it Pre-foreclosure?
If not, then is it a REO listed on the MLS?
What about the foundation? Has it been inspected?
How old is the house? Is lead paint a problem?
What about mold and termites? (costly to remediate)
The general formula used on this board is
(ARV x 70%) - (repairs + selling/holding costs+assignment fee)= MAO (maximum allowable offer).
You’ve got to include all of the probable expenses/costs that a rehabber will encounter when calculating your maximum offer. Hope this helps!
Bobcooltx,
Thanks for the insight—
What do you mean the “house is ‘in’ foreclosure?” Is it Pre-foreclosure?
The house is in foreclosure and is listed on the MLS
What about the foundation? Has it been inspected?
It’s a slab foundation and seemed solid all the way around. Other properties in the area are on the same level and there didn’t appear to be any drainage issues from them to this house. No basement to be concerned with.
How old is the house? Is lead paint a problem?
The house was built in the early 60’s and there is some lead paint to take care of, but from what I could see it was mostly on the outside windows.
What about mold and termites? (costly to remediate)
I couldn’t see any mold or termite damage, but would need a complete inspection to be certain.
The general formula used on this board is
(ARV x 70%) - (repairs + selling/holding costs+assignment fee)= MAO (maximum allowable offer).
Using the formula I’ve seen here that would put my offer right around 60-65 and a sales price right around 115-120, which is what I was thinking as I was walking through the house. Another investor was there as I was doing my tour and I was asking his views. The numbers he was working in his head were the same as mine.
Thanks again for the help.
Naperbill
You’ve got to include all of the probable expenses/costs that a rehabber will encounter when calculating your maximum offer. Hope this helps.