I Got The House Under COntract -- Now What
We are following Legrands method for wholesaling Ugly Houses. So we drive around and found a not so ugly 4 plex and actually got it under contract. Now I cant find any comps and the owner has not had it appraised. We are trying to sell it within the next 24 days. I have gotten prices on similar quads but they vary so much in price that I really dont know how much to ask, so it will sell quickly. He is aksing $175K. Also, we have beeen advertising it, but the investors are asking for income/expense reports --Legrand never mentions this. I really want to get this first deal under my belt-- Can anyone offer good advice?
You just took yourself to a seminar...
My advice, let this one go, go through Ron's course AGAIN and AGAIN and start over.
Stick to Single Family houses in the beginning.
If you dont know what it's worth, how do you know what to sell it for.
What if it's only worth $165k and you have it for $175k? Who are you going to wholesale that to? The other investors asking for the reports know what it's worth more than likely. They're a step ahead of you. As a wholesaler you need to 2 steps ahead of your customers at all times.
Start over, you just learned a big lesson "Pay attention in class!"
JB
[addsig]
When I read his info, I thought it covered SFR pretty well, and said to stick to SINGLE FAMILY RESIDENCES when using those methods.
This may get better responses for you in the commercial forums.
Good luck,
Jeff
OK,
Yes, I am in over my head, which is why I came asking for help. I will post my question on the commercial board as suggested, but in the meantime if anyone has any suggestions, they would be greatly appreciated.
Thanks!
brokenomore,
Saying you are "in over your head" maybe the biggest understatement I have seen in a long time.
If you don't know what the value of the property is how can you expect anyone to help you determine what you should be selling it at? You can ask your question on any forum but the advice you will get is did you get the income/expense reports or at least a solid value of what property is worth.
The title of your post pretty much sums it up "I got the house under contract - Now what" or let's relate it to there are people who jump out of airplanes all the time, but what's that thing called again they should be wearing as I am going on my first jump tomorrow?
Good advice, go back to the books, ask questions before you sign the dealnot after and before you get your first deal under your belt make sure it isn't your last deal.
John $Cash$ Locke
[addsig]
Ok, so the answer is, you spend this weekend learning how to run a proforma income/expense analysis of this property to see what it's worth. It's value is a derivative of it's net income.
You need to get yourself a quick crash course in figuring out how to evaluate rental properties. Maybe you have a good deal here, maybe not..... you won't know 'til you run the numbers on it.
John, where should he get the income/expense report?