Offer being made...Need help

Look at what similar houses (same floor plan, year built, bedrooms/bathrooms +/- , SQFT +/-) sold for in last 3 months, 6 months or older if there hasn't been any recent sales activity to compare with the property (subject) you're considering offering on. You can find out from your tax assessor's office what it last sold for and assess value of building and land it's on to make a inform decision of what you're willing to pay for the property overall. Take in consideration your renovation costs as well. HTH.

Thanks HTH I appreciate it. I looked the house up on our county website and nothing is found. I don't know if it is because it is a foreclosure, but when I put in the address it doesn't show anything. Any recommended websites you would suggest?

Thanks again

Hi Rusty,
Are you looking to buy from the seller or the new buyer in motion? In my opinion I wouldn't make an offer until I've seen the condition of the home. Knowing the condition inside is a major part of the offer price. This is important if your buying from the seller. There's no way to know what the other offer is til you put yours in writing. Your agent should be familiar with comps on this home. If she is already aware of what it will rent for. Was the other offer made through this agent? Continued success.....Lubertha

I am purchasing it from a cash buyer. He is putting in an offer with cash, and turning it around and offering it with owner financing(probably not using the right words) I was able to go out and look at it. It looks like there is cosmetic work to be done. I don't know really what it will cost me to fix. I would guess 5k, but I will up that just in case and say 7-10 thousand. I would want that financed in. Hopefully this makes sense. I did more research and it looks like homes in the area are selling for about 100 thousand. My idea is to fix it up for renters. I would want to finance in the costs it will take to fix it up.

If the buyer is probally some where around 45 if I had to guess. So my offer would start at 56 with the seller giving 6 back for repairs. If the Fair Market Value is 100. I would start low because its harder to price down than up. Just make sure you add a subject to home inspection clause. Keep us posted. Much success to you.......Lubertha

Lubertha is right always offer low and work your way up until u both agreed on. Would be a good idea if the realtor allowed you to get a handyman to give you some rough estimates how much it is going to cost to repairs. That way you have a better idea how much to offer the house. Let us know how you make out.

Warm regards,

Paul

Thank you very much. That is a great idea about a handyman. It will also buy me some time too. Very good advice. I assume that since he is a cash buyer he will be able to offer a lot less than the 67k that it is listed for. So for example if he offered 50k, and I find out it will cost 5k to fix to be good to rent, would I offer 55k? And I wonder if there will need to be a down payment, how could I be creative with that? Any suggestions anyone?

Thanks Paul

I would throw in my 2 cents and recommend to definitely get a solid estimate of what it costs to get it rentable.. Nothing is worse than running out of money and the place isn't rentable. No money coming in for rent and now a mortage payment. Just get your estimates up front and tack on 10-15% above that. Good luck! It can be done and that's where you make your money.

- Tom

Thank you. That gives me better perspective. This is all subject to his offer being excepted to. But if anything this is getting me prepared. I love this site! Thanks for all the encouragement. Go fight win!!!

That is good advice to! Adding on 10-15% ensures that I will have a buffer. I don't want me first deal to turn out to be a nightmare! I will try looking for someone that can come out to the property to do an inspection. Do they usually charge to give me an estimate?

Inspector will charge you anywhere from $325 on up. It just depends on rates they charge in your area. Do get someone who's thorough though in their inspections. I like the guy with all the gadgets (hopefully he knows how to use them all). Contractors usually give you free estimates hoping to get the project just make sure you get their references though. That way you can judge for yourself their work ethnic, track record (guess that's could be the same thing as work ethnic) and how they control any subcontractors they may hire out to complete certain parts (e.g. electrical, plumbing) of the job.

Thank you. It is all new to me, so I appreciate your input. What I want to make sure is to get a free quote first, because my offer is only contingent that his offer is excepted. I would hate to spend the money and have it fall through. But when I have the actual inspection I will go full out and have the contingency clause based on the inspection. Don't you think?

I would go for 50 to 55,000 offer. Inspector costs around $300 to $400.00
and you want to be sure that you know what's wrong with the place before you buy it. So the owners may do 100% financings for you and that way you dont have to put down a down payment. There are ways you can buy with no money down and no credits. Hope this helps !

Warm regards,

Paul T. La Moy

On the inspector it pays to ask questions. I had my home inspected and it had a woodburning stove but the person I got was not rated to inspect those. I didn't find out until later from him about the rating system.

is there to cover you the potential buyer of the property before you agree to give seller your money! It's an escape clause, in essence, in the case a major structural defeat (that's beyond your expertise) or something you don't particularly like is found to be wrong with the property. @Hoosierman & OP: Not all inspectors are going to license in other professions (e.g. A/C Cooling/Heating technician) to be able to inspect or tell you what is actually wrong with any particular component (System) in the house.

That's why you must do your due diligence to get the proper Professionals and/or Builder/contractor (very knowledgeable one I might add) out to potential property to properly inspect & give you estimates of what it will take to either repair and/or replace those System(s) with similar or better Product. Hope this helps.

Thank you. I will do my due diligence to make sure the property is inspected properly, especially because of the condition it is in. I would rather spend more money to insure that I know what to expect

Now the question is with financing. How could I convince the owner to finance 100% and get money for repairs without spending any of my own money?

I read the whole forum and all the post and I just wanted to ask you some questions first.

With whose capital were you planning on doing the flip with? Were you trying to finance it out of the cash buying investor? Good idea, but does the investor have the extra funds, I know I know he just bought a house with cash but if you truly can't answer yes to that question you should get in touch and start talkin.

Also have you crunched the numbers on it yet? Rent for 700-750. Will it cover your financial obligation to seller. Is that cash flow worth it? Assuming you were buying and holding, don't know I don't think I read that anywhere if you were or not.

With the Owner financing, crunch some numbers and throw them his way and show him your good for it, might have to show him proof of income, well that's how I got my credit lender. If he knows you plan on subleasing it out (make sure you have that contingency in your contract) show him those numbers as well, so that he knows 100% that he'll get what he's owed... Hard to say no when your money is guaranteed.

Me personally, it sounds like a good old fashion Sandwich Lease... You lease from him then you lease to potential buyer. Or atleast that would be how I fashioned the deal.

Anyways your SO CLOSE!!!! DON'T STOP YOU WILL SUCCEED!!!!! KEEP AT IT!!!!!!!

Knowledge is Power
- Pimpedoutgeese

Another thought would be if you didn't want to go the inspector route up front is get the seller to do the repairs subject to a home inspection. Have them do 100% financing. It all depends on how much profit the buyer is looking to make. Keep the numbers to your advantage and make it work for him also. Unfortunately you don't know about this until you start throwing numbers out there. Hope this helps. Continued success............Lubertha