Person bought this house, put a bunch of money into it with the idea of reselling it as far as I could tell from her emails. When I found her ad she was out of money, 2 months or so behind on payments and selling at a breakeven price of $265k to get out asap. That was probably 2 months ago. Now its up for $249,900 so figure shes $15k below breakeven now and its still not moving. I’ve seen the appraisal, it does say $300k on it and it was from December '06 so its current but based on her trouble selling for even $50k less I’d say the appraiser was certainly not correct (maybe the comps were old sales or listed prices?). $50k in equity, pipe dream. I hate to point out people’s failures but this is a solid lesson in KNOWING YOUR MARKET! Seems like she was definitely off on her ARV, might have been low on her cost estimates as well and now she has no money and will be lucky to walk away without going totally broke with ruined credit. Please people, do you research before you buy. Sad, its a nice house.
$50k in equity, pipe dream. I hate to point out people's failures but this is a solid lesson in KNOWING YOUR MARKET! Seems like she was definitely off on her ARV, might have been low on her cost estimates as well and now she has no money and will be lucky to walk away without going totally broke with ruined credit. Please people, do you research before you buy.
Excellent post Rich! That is good advice, especially in such an uncertain market.
I don’t remember exactly what she did. The main point I wanted to make is that anyone attempting to rehab needs a firm grip on ARV and rehab costs (including quiet costs such as the cost of money).
Also a very good lesson in market valuations in a falling market.
In this type of market you really need to steal properties. If I can’t buy them for my price I’m done. I will also say that my phone is ringing off the hook lately with people just looking to GET OUT. Not a lot of great deals though. Did 4 in the last 2 months. No home runs just Quick flips to builders/ remoldelers.
It’s like the saying goes “you make your money when you buy 'em”
Just tougher figure ARV’s in a falling market. the solution is deep discount buying.