Help On My First Deal?
I have a motivated seller, who will take 125,000 for a 150,000 dollar home. Comps are at close to 200k. needs about 40k in repair. I don't have cash or credit. I was wondering if I should have her sign an option to purchase, and start looking for a rehabber with cash, and then do a double close? What would you do?
Sign an assignable purchase agreement. Then find a rehabber. BTW 40k Is a TON of work on a property, and there will not be much cushion for profit. Rehabbers (I am One) want to be able to sell below market, so their money is not tied up too long.
You might consider purchasing on a contract for deed for a certain period of time then balloon out.
While doing repairs, you need to look for investor or HML to help pull the deal through.
Maybe I demand a higher return on my investment, but I wouldn't consider anything with an after-repaired-value of less than 70%. How accurate is this $40K worth of repairs? If this is your first rehab, it's easy for costs to get out of control. For your long term career, please proceed with caution to keep your profit margin as high as possible.
Best of luck.