Is This Deal Worth It?
Preforclosure in just a OK area
Is this worth it to flip?
3 bed 1 bath 900 sq.ft. plus 1/2 basement
Payoff 48K
Bank had a apprisal 8 months ago when owner went thru bankruptcy for 65K
Also would like to flip. But could put in another 7K for paint, carpet, kitchen cabs and few other repairs and rent fast in my area for $750.00 a month.
Thanks for any suggestions
Looks pretty thin to me. Most rehab guys need to be at 70 % or less of appraisal or resale value to realize a profit after adding in carry costs, closing costs, commission, points to lender etc. I even want to buy rentals where the rent is twice the payment. May be good to buy and sell to a tenant/buyer or a lease option but you will be tying up lots of cash unless you can get a loan after the rehab for most of your costs.
Hope this helps some
Ted Jr
Looks like a good deal to me, but I'm in California where finding positive cash flow in a rental is, well, heaven......
As long as you don't have to tie up money you might want elsewhere in the meantime, I'd say go for it. Might want to run some comps for a more recent idea of the values in that area. You could rehab and sell or sounds like a good one to hold/rent. But if you say it would rent easily for $750, (sounds like a strong rental market area), any way you slice it - I'd buy it.
Good luck -
Hi,
I ran the numbers.
48 + 7 = 55.
65 - 55 = 10.
So, if you flipped, you could possibly gross ten k; that doesn't account for holding costs.
If you rented it,
48 @ 7.5% = 335.62 + 100 of taxes + 300 for ins/mo = 465.62 - the 750 for rent would leave you 284.38.
I would fix it; then rent it out. If you want cash out right away, you may want to consider a lease option.
Thanks,
OTW
I think lease option is best way to go when deals are thin like this one. Too thin and too much risk to try and fix and flip
What about back payments, fees, taxes? That throws the deal way off. Ideal would be to take over the house subject to (buy) and lease option it to tenant buyer (sell) and collect strong enough option payment up front to cover the arrearage owed (plus profit, or add'l money for fix up to t/b).
However, go ask people who have DONE deals like this, e.g. subject to forum, lease options, and see what they think, though I think others might agree with my line of thinking.
The person who said, great, just go do the deal, is not evaluating all the options, and you should never go do a deal because someone else wishes they could do it due to their unfavorable market conditions, as well meaning as they might be. Best of luck, Dave
keep looking for a better deal