Rehab House FSBO
I have several homes I have purchased for rental property and they have had minimal issues (bad carpet, holes in drywall, etc).
This house has BIG issues but I feel it is a great deal. It is FSBO and he wants to close quickly. I have always used realtors in the past and I feel a little unprotected and so a little uneasy.
A few stats on the house:
3/2 2000 sq. feet
asking 105K
comp shows homes selling for 175K
est. rehab 25-30K
this includes floor jacking, paint inside and out, refinished hardwood, replacing damaged wood, grading the property and other misc. cosmetics.
Any trouble dealing with FSBO's? I do know that he is flipping the house. He hasn't had it three months.
Thanks for any advice.
IMHO, the fact that you are not working through a realtor shouldn't make a difference...it is still up to you, ultimately, to make sure you have yourself covered. If you have done other deals with realtors, then you could follow the same steps they have in past deals. Make sure it is all in writing, tho, and make sure your offers, etc. have deadlines.
Get a good inspector or even structural engineer to inspect the house.
One question I would have to ask myself is: Why is it up for sale? Why isn't the current owner willing to do the rehab and make another cook $40K? I probably would.
Good luck.
The owner says he wants to move it because he has several other homes he is currently working on. He says he put it on the market and if it sells, it sells and if it doesn't, he will eventually get to it.
If he found major structural damage when he went under the home wouldn't he have to disclose that?
Its not strange for another investor to sell a house he has had only a short time. We call that wholesaleing houses off. You can believe that if he is selling the house for 105 he dindn't pay more than probably 95 probably less. I do it alot, find a good deal buy and and then flip it to another investor for at least a 10k profit for me. Just makes sense, keeps money flowing between sales of rehabbed homes. As far as buying with out an agent no problem. You should have bought enough real estate by now to know what a standered real estate contract looks like. They are all pretty much the same. plus you usually can buy cheaper because your not paying the realator fees. If your worried ask to see a copy of there contract and take it with you and compare it to the ones you bought houses through a realator.
[addsig]
The rehab est. 25- 30 are those your #s or his?
If they are his numbers, I would verify them especially the cost of the jacking.
I would also run my own comps if you havent done that already.
As previously mentioned buying a fsbo provides the same protection or lack of as through a realtor.
Hire a home inspector if you need a second set of eyes.
If everything checks out, I would look up what he paid for the place and go from there.
What do you want to do with this house?
Best of Luck
JohnNH
Prior poster most correct.
The real position. check the prior sales price and see what cash, if any is involved and also if there was a forcl and advances to cure.
With this additional information you can evaluate the sellers position and perhaps make you r deal a little sweeter. I would craw the bottom just in case.
Get rich. Lucius 8-)