hello all!
I’m a newbie investor in CO. I’ve got a potential rehab opportunity.
I’ve found a house that is in pre-forclosure. Buyer has 60 days to remedy, but most likely she wont as she has already moved out.
3bed/2 bath–> 1,275 sq ft/ additional 700 sq foot finished basement
Current market is bringing $220-$225 for similar houses.
I can put a contract on this for $174,900.
The house will need lots of help though…
new kitchen, update 2 bath rooms, carpet, paint, landscaping, 1 new window
Here’s what I’m thinking…
$220,000
-$20,000 rehab
-$6,600 agent commision (@ 3%)
-$3,486 3 month holding cost
-$1,750 closing costs
=$188,164- $175,000 (purchase price)
$13,164 Profit
What do you guys think? Anything else i should consider?
How do you get a Realtor to do it for 3%? Most of them in North Dakota want 6 or 7%. If you have any thing go wrong you will go from making to losing money. My knowledge is in fix and flips or fix and rent.
I just went to this web site and their appear to be many foreclosures on the market in Colorado. If a house is listed on this site it does not neccessarily make it a good buy. You have to know your area before purchasing. I will close on a HUD house on tuesday that is about 35% below market value and I expect to make about $10K on it after a refinance and I rent it.
http://www.hud.gov/homes/index.cfm
Good Luck and don’t give up!
NDI
Your total cost/expenses should be 70 to 80% so reconsider.
Also always consider how the extra unexpected rehab cost can add up.
If the house isn’t listed why don’t you make them an offer and close with the title company? They will give you all the papers and help if you have any questions. You could save yourself alot of money.
Hopper