I just found this and was thinking… whats the catch. Of course, I haven’t seen it yet but it a house is valued at 335K, one woul dhave to assume that this may be a good deal… Anyways… perfect question… would this be something that could be done with no money down? Considering the equit yhtat is already there? (35k) What are everyone’s thought on this based on this info and based on the fact that you’re talking to a rookie at REI…
Thanks!
3 BR/1BA Split-level home. Buy now and have $35K equity! House valued at $335,000 but selling for $299,000 (firm).
New Kitchen, New Bathroom, Hardwood floors through out. Lower level family room plus 3 season porch.
Well the value alone of the house does not say anything about whether it is a good deal or not for 1. Even the difference of the price and the value does not make it a good deal.
Who is advertising this house? A realtor? An Investor?
Is this home Pre-Foreclosure? In Foreclosure? Bank Owned?
What do you plan to do with this property? Resell it at fair market value (FMV)? Lease/Option (L/O)?
If you resell it you will have to wait for someone to pay that full price/value amount. How long will that take with you making payments? Do comps support that price as a valid price to pay for the house.
To alot of us noobs who aren’t use to making thousands of dollars without working 4 x 40 hours work weeks, 35k seems like alot, but when looking at the price of the house, you are talking about 10% off the price. You and I can prolly agree that that is a discount not a windfall. If the house was valued at 100k and was priced at 90k would ya jump at it?
Give us some more details on the house and what you plan on doing with it. Or even what you paln on doing in general with REI.
For a profit margin that small, you might consider a much cheaper house. $20k is $20k, no matter if it’s made from an expensive house, or a junker. I buy junkers and fix them up, becuase there is less liability that way. You are going to get killed if you buy the house expecting to flip it and can’t sell it immediately. The holding period on a house that expensive will be brutal. Just be careful.
Thanks Mr Fancy…
Thats the type of answer that I"m looking for. What do you normally see as a target price for me to look for when looking into properties that I can buy and hopefully quickly sell? If there is a good price range.
I live in Nashville,Tn and there are a lot of neighborhoods here with low income areas and good rehab potential. I try to buy in those areas. If you live in a rural type area, it might be a little more difficult. Don’t ever think that because a house is extremely cheap that it’s a complete waste of your time. Those are actually the deals you should be looking at. I made an offer last week on a 20k house that I could probably flip for 78k after repairs. Just remember that you’re not buying these houses for you to live in, but for someone else to live in. Hope this helped.
DOH! Sorry I am not good at giving out answers as I am still new at this myself. I tend to ask alot of questions in response to questions hoping that in answering them things will seem more apparent. I do the same to myself when trying to analyze something with pros and cons. Lots of what ifs and such.
Mr. Fancy…
Thanks for the info… 20K!!! The only thing I can find around here around 20K is maybe a double wide if i’m lucky… What if i bought two single wides and then put them side by side and make it into a double wide?? Would that qualify?
No but seriously, would you agree that it all depends on location or do i just have to look a little harder!?
Hey now, don’t make fun of them single wides. I am working on buying about 3 or 4 of them right now. Though they are a whole different animal they do actually produce WAY better yields on the amount of cash used to produce the notes on them.
They will all be purchased between $2,500 - $5,000 each and after some cleanup and about $500 - $1,000 fixup I can sell them like hot cakes for $6,000 - $10,000 @ 12% interest for 36 months. NICE!
I will get back to real estate once I get moved out to Florida. Until then mobile homes are quicker turn around.
Heh, yeah! Seems I am one of very few posting lately in the Commercial, Mobile Homes, Notes Forum section of this site regarding creating mobile home notes/cash flows.
Mr. Fancypants is right that is not a deal for you, but more for an end user, which is the market you will hopefully target for your sales. Location does matter scotty, but from the info you have given for the area you are looking, you need to find a property that comps in that same neighborhood for $200k. At least that is what I would do, look for a similar property in that neighborhood that needs work or that is just a steal. I would look in the $200k and under price range. I would limit the construction costs to $25k for $200k, $50k for 100-150k, etc… This would be a simple format to follow for areas that are high priced like MA, NY, CA, just to name a few. Sit down and try to come up with your own numbers that you think may work for you. Check out material costs to do a great job and if you aren’t a contractor, most importantly you will need someone that can get quality work done for a reasonable price for you.
THats great advice too eve… Thanks! I’ll definitely keep looking. . I think im ight look further and further away from MA… But by doing that, that limits on how much I can keep an eye on the property if it was in another state… Thanks again though!!! I’ll do some numbers!
Would that qualify?