130K House price
20K-40K Rehab
180K Comps (conservative)
He told me he would come down to $118K, owns the house outright. This is my first rehab (I used to have a concrete company, but wasn’t a builder) so not sure on the exact rehab costs. I thought I could write a contract in which the owner (who is single and moving out of town for his new job) could hold off on the sale upon completion of repairs-then divide the profit between the two of us??? I could come out of pocket for the repairs.
Any suggestions would be appreciated. I think it is a good deal and am trying to be “creative” (since he said no lower than 118K and I am not confident of the actual repair values.)
Get a 10 day option on the house and get a contractor in who can quote the rehab price (contact your local REI club for resources, or just check the paper)
How “conservative” is that $180k?
A “profit” based contract is a contract just waiting to for a lawsuit, unless you can define every “expense” that will come out of the revenues. If you don’t have the funds to buy and rehab the house, you could consider:
*getting a HML for the purchase and paying for the repairs out of pocket. This leaves you quite a bit of exposure (over budget on rehab, too long to sell / overpriced.)
*birddog it to someone who can do the deal.
having said that, i don’t know know if there’s enough spread for this deal to be a “must do” first deal.
I had a realtor run comps on the neighbors house and it sold for 184K in 2001, and he told me that he thought it would list for 220 and sell for 200 so 180 conservatively.
I think I will have a contractor go over and give me a price to fix up.
So therefore your’s is worth that now? You’re not seriously valuing homes based on a 7 year old comp on one home, are you? How well do you know this realtor?
Within the last 6 months, or sooner, and within ½ mile, what have similar homes actually sold for?