Please analize my first possible investmnt

Rehabbing, Fix and Flip, Rental Properties
1

First time invetor. Can someone analize my possible deal to see if I’m on the right track.

ARV Analyes
ARV, I did my own market value using realtor.com. I found 5 condo’s same size in # of bd,bts,sq ft. , etc. I came up with a ARV of about $51,000. The most recent sale were in November, August and Oct.

55,000 sold 11/04/2008
$35,000 9/17/2008
$75,000 8/5/2008
$55,000 11/3/2008
$35,000 9/17/2008
Total avg.sale price: 255,000/5= ARV of $51000

ARV 51,000
Purchse Price (16900) sale price, I want it at 10,500
Repair Cost (3500) paint, tile kitchen,
Holding Cost (4000) HOA,insurance,utilities, and taxes
Sales cost (3300), fees, title insurance, documents
Gross Profit 23,300

I will invest 10, 000 of my own cash. The place looks like it is in renting condition. I would live their. It doesn’t say it is a fixxer, but I wanted to do a little descretionary spending to help sell faster.

Are these good numbers ?
Am I missing anything?
What additional investment cash will I need?
Would you suggest renting as investment property or resell for profit?
Do you think I should buy and clean up and do no scretionary spending?

I appreciate any honest straight forward answers.

Thanks to everyone.

I am in CA if this helps any.

2

Anybody. Did I put this in the wrong forum?

3

It seems like your budget for improvements is a little small. When you go to sell your house, a home appraiser is going to see what you paid for it, and may want proof of the improvements that you’ve made to increase the value by $40,000. If a simple cleaning would do that, I don’t think it’d be on the market very long. You may want to do a little more research into why some sold for 50k+ and some for 35k.

4

Thank. How do you go about finding out what these other properties had that sold for 50k. Is ther a way to do that?

But overall you think I’m not leaving anything out, but suggest loking at improvement cost?

I can probably put in Granite tops for $1000. I am experienced in this field and can easily do this plus material.

5

A Realtor may have a book of the old listings, you can look at the text of the ad and see if there are amenities listed on the high priced condos that the others didn’t have. Check the neighborhoods and see if they are comparable. You’ll also want to check for places currently on the market, what they are listed at, and how long they’ve been on the market. Tour any of these that you can.

It doesn’t look like you left out any numbers, except a Realtor fee if you use one to sell. How long did you estimate holding costs? Make sure it’s at least the average time on the market plus a couple months.

Hopefully someone else will let us know if I missed anything.

6

JTT,

Thanks for the advice I apprecite it. I will see if I can ge a CMA from a locl realtor. I will also work on my rehab cost and any other numbers that are missing or need adjustment.

Joe

7

It’s listed for 16, 900? Why is it listed for less than half of the lowest comp? Is there something in the disclosures you should know about?

8

Mike,

re you saying that its to low of a price?

9

Joe2468,

First I would throw out that sales comp (comparable) from last August at $75,000. It’s too far out of line with the others. Make it a conservative average.

Next I would research the Homeowner’s Association information to find out if there is a large pending assessment or other negative that is going to hit all owners. What is bringing down the prices? Is it just the bad market?

Get your answer and then carry on! It’s a great time to be bottom-fishing. Let us know how it goes.

Furnishedowner

10

Today I went to the town were these codos are located. The comps I first posted from realtor.com are 1 block away from these condos as I was driving around and noticed.

So I found 1 comp from zillow.com that is 1 of the 4 units. It is down stairs from the one I’m looking at. This one sold in 8/9/2008 at 98,000. The tax assesed is at 91,000.

I personaly didn’t like the area. But as I drove the nieghborhood. I notice mostly new cars, Park across the street by river. 2 minutes from freeway. The nearest target and these types of stores were about 5 minutes up the freeway. The landscaping all seems to be tooken care of. Seems quite. Seen a few rental signs up.

Looked at the one I;m iterested in and looks like it is your average rental. I’m see potential improvments.

Does this sound like a good area to fix up and sell. Taking opions. Or would you just rent.

Unit
Built in1970 , 924sq.ft., 2bd,1bth, upstairs. 1 car garage.

Comparable
Built 1970, 794 sq.ft., 2bd,1bth,downstairs unit, ! car garage.

How would I check the homeowners association? Can I do it online?

11

Joe,

I don’t know if you can check the Homeowners’ Association online, you can try. I would wander around and ask residents. “Do you know anyone who is on the Homeowner’s Board”? Then I would just knock on their door and ask them how to get info. as you are trying to become the new owner of a foreclosed unit. The laundry room, pool, mailbox area, parking lot, or play areas should have some people you can ask.

You can offer to pay for making copies. They should want to help you as an empty foreclosed unit is not an asset in the complex.

Good luck in your search.
Furnishedowner