I am looking at a house thats 10 years old. Needs about 10K in rehab. After repair value of $130k, and I would need to pay around 91K to get the house. How does this look taking into account holding and selling costs?
The random variable here is the holding cost. You can probably estimate the closing costs rather accurately with a few phone calls. You might try to get estimates of holding time based on current market conditions in your area. In most areas you can at least get average time on market . From this you can generate pro forma holding times and calculate the associated holding costs.
"Buyer to convey "committment to lend" to Seller within 14 calender days of the acceptance of this contract. If "committment to lend" is not received by Seller within this timeframe, Seller has the right to market the property until the Buyer conveys the "committment to lend" to the Seller."
I am not an attorney and this is how I would word it. However, to better protect yourself you could have a lawyer right this up for you.
By doing this, if the buyer does not produce the committment to lend, you can then try to find another buyer, thus not taking the home off the market for more than 2 weeks. If and when they produce the committment to lend, you know that this deal SHOULD close and you can stop marketing it. Until you have the commettment to lend, though, the buyer might not qualify for this home even if they were pre-approved.
The random variable here is the holding cost. You can probably estimate the closing costs rather accurately with a few phone calls. You might try to get estimates of holding time based on current market conditions in your area. In most areas you can at least get average time on market . From this you can generate pro forma holding times and calculate the associated holding costs.
Sounds like just the type of property I am buying- but then again I like being a landlord, or rather I like the income and future potential in it.
Would this be in Lansing by any chance?
Chris
What town is the property located in?
Just state:
"Buyer to convey "committment to lend" to Seller within 14 calender days of the acceptance of this contract. If "committment to lend" is not received by Seller within this timeframe, Seller has the right to market the property until the Buyer conveys the "committment to lend" to the Seller."
I am not an attorney and this is how I would word it. However, to better protect yourself you could have a lawyer right this up for you.
By doing this, if the buyer does not produce the committment to lend, you can then try to find another buyer, thus not taking the home off the market for more than 2 weeks. If and when they produce the committment to lend, you know that this deal SHOULD close and you can stop marketing it. Until you have the commettment to lend, though, the buyer might not qualify for this home even if they were pre-approved.
Good Luck!