Thoughts on Quit Claim Deed Rehab?

Rehabbing, Fix and Flip, Rental Properties
1

What do you think about this deal…(keep in mind I’m not a high roller yet)…

The deal is going to be “Quit Claim Deed”
115 House Mortgage
13 Assignment Cost (the middle men)
2 Repairs (curb appeal)
2 Holding Cost (mortgage is 1k/month, I figure two months tops from repairs to sale)
5 Selling Cost (3% buyers agent + 500 to put in MLS)

137 TOTAL COST
145 Appraisal (I think I can sell for 150 after curb appeal repairs)

8K profit (if I can get 150, 13k profit)

2

Here are my thoughts:

  1. You’re taking all the risk and the “middlemen” are going to make more money on the deal than you? That’s just not right.

  2. If it only takes $2K in repairs to bring the value up to $145K, why would a sophisticated seller let this house go for $115K? To me, that’s a red flag. Your “middlemen” could make $20K by investing $2k more, and they don’t want to do it? And they want to sell it with a quitclaim deed? My bullshit radar is flashing red alert. Is there a problem with the title? Why won’t they give you a warranty deed?

  3. Finally, $8k is just not enough profit for a rehab. Your risking $137K of your credit or cash if everything goes south. That’s not a lot of reward for the risk your taking, IMHO.