Fixup Or Sell As Is - Opinions Please
I just purchased a house for $70K. It needs flooring, paint, other fixups totaling about 4-5k.
If I sell as is (which I am doing) I can get 95K. If I invest the 4-5K I could get another 10k. What would you do? We will close with a total holding time of 30 days.
ItzMe
P.S. It would take me about 1-2 months to fixup
Wholesale it quick and move to the next one because once you start fixing it, you never know what you'll find next and next ... and then, you may even have to dislose found defects once you notice that they exist or the buyer may sue you.
Unlikely for that price range but why take the chance? Good lack. let us know when you got it sold. Stories like that are always apreshated because they bust the young and old investor's moral. [ Edited by omega1 on Date 01/22/2004 ]
I would say do the fixups if you have the cash. It won't take you a month to do these things. Hire them out and get it all done in a week! It will look MUCH nicer.
Good carpet for that house should run you $1.30-$1.40/SF INSTALLED.
Paint can get expensive. $2000 or so?
I'm not sure what else needs done but I'm sure it is pretty cheap.
If your numbers and time estimates are accurate than I would pass.
Your figures say that you invest 5k to gross 10k. What about the holding costs? Another $1000 to $2000 by the time you get done? What if it costs you 6k to fix up? You are talking about taking 2 months to net $2000 to $4000 more?
Only you can say if it is worth it.
But to me if the question is making 25k now or making 27k 2 months from now, I going to take the 25k now and move on to the next one, maybe you will do another one and make another 15k within two months. That is 25+15=$40k in the time it would take you to make the $27k.
Anyway I look at it, I take the 25k now.
This is the time to do some stageing. Clean the place up, but put a 5 gal bucket of paint in an obvious spot.
Advertise it now. When the prospect comes over, make them a deal they can't refuse. "You, know it you folks would like to have this house for the bargain price of $100k and you do the work as "sweat equity" fine. Otherwise I can do the work and sell you the place for 115 which do you prefer." If they want you to do the work---you can have it done by the time it takes for them to get their financing approved.
I agree with Sammy!
Paint the outside, clean up the yard and
put an ad in the paper for a:
"Handyman Special"
This has been a very successful tactic I have employed over the years. I think you will have much success with this.
Jeffrey Adam
_________________
"The only place success comes before work
is in the dictionary."[ Edited by JeffreyAdam on Date 01/22/2004 ]
Well, you'll make what? 25K for just buying it and selling? Or an additional 10k for 5k of work? I'd buy it and sell it. Maybe I'd paint it. That would be about it though.
Thanks,
OnTheWater
Thanks for the input everyone!
I bought it two weeks ago and the tentants took 8 days to move. I put a FSBO sign up in the yard and received 3 calls in 2 days.
One lady was really hot to buy a house for her daughter. They had recently missed out on the one across the street. So 15 days after Sheriff's sale I have it under contract for $95K.
My costs so far are for a scented candle!!
She wanted me to "work with her" being there was no stove or dishwasher...her hubby would install if I would buy.
Mrs. Buyer, if we can close this thing in 2 weeks I'll give you $500 for Stove/DW at closing. Well, I was thinking $1,000. NO WAY I replied....my wife wants me to paint this place and sell it for $110K.
She accepted the $500 but wanted 3 weeks to close.....Oh Ok I guess !!!
I have lined up the lendor, closing attorney, and appraiser. They said 2 weeks is fine.
Bottom line.....I will be in and out in 5 weeks total with a profit of $24.5K. Oh, I did use 1/4 can of lysol spray too....is that deductable on taxes?
ItzMe
Bottom line.....I will be in and out in 5 weeks total with a profit of $24.5K. Oh, I did use 1/4 can of lysol spray too....is that deductable on taxes? <IMG SRC="images/forum/smilies/icon_lol.gif">
CONGRADS......you made the right choice by far.
and as for the lysol spray.....you can deduct 1/4 the price....save the can and do it all over again..........(laugh)
My rough rule of thumb is if I put 1dollar in I want 3 back.
O would sure like to know where all the 1.40-$1.50 a sf installed flooring is? I have heard about it on this site and have yet to find any FHA grade flooring at that price. I have never been under $16-18 a yard ever and I do flooring on 10-20 houses a year.
I would love it if someone would PM me with their source!