OfflineI ran an ad on CL... I buy Houses! A lady called me today and said she has a house that she is trying to sell. She is asking $8000 and states she will take no less. I will offer less though because she is motivated!! It is 2/1, 880SF and needs some work. She stated she bought the house at a tax sale and was going to fix it up herself but decided she didn't want to do it. She said she is trying to fix up her own house and it was just too much. (There could be more to it than what she is stating) She said it needs sinks, toilet, bathroom floor (soft) and there was a leak around chimney so it could need a new roof... although she said it could be patched. She said she was going to fix the plumbing herself.. She also said it was broken into since she has had it. I'll find out more about that tomorrow. It was rented previously for $500 but it has been vacant for 2 months. She states no taxes owed, no liens and no mortgage. I'll be looking at it tomorrow and just wondered how I could make an offer if it needs more work than she is asking and apparently it does. Is there another formula for when the asking price is less than the work required? She had it on CL for $15,000 and reduced it to $10,000. Totalview shows estimate of $47,273 and Zillow $49,500. Should I just try to assign it to a rehabber (provided I make an offer)?
Everything works out in the end. If it hasn't worked out, it's not the end.
You have not lived a perfect day, unless you have done something for someone who will never be able to repay you. Ruth Smeltzer
It is what it is 'til you change it.
That the owner bought this property last Sept for $200.00... No way will I offer $8000!
Everything works out in the end. If it hasn't worked out, it's not the end.
You have not lived a perfect day, unless you have done something for someone who will never be able to repay you. Ruth Smeltzer
It is what it is 'til you change it.
She lives in Florida!
Everything works out in the end. If it hasn't worked out, it's not the end.
You have not lived a perfect day, unless you have done something for someone who will never be able to repay you. Ruth Smeltzer
It is what it is 'til you change it.
She has the property on CL too and is having open house tomorrow. The pictures look terrible, but that doesn't mean anything... hopefully it's not all bad. I'll just have to wait and see. 70% of FMV (using tax assessment of $22,000) would be $15,400, which is more than she is asking. So I guess I would take 70% of $8000 which would be $5600. But what if the repair estimate is more than $5600?
Everything works out in the end. If it hasn't worked out, it's not the end.
You have not lived a perfect day, unless you have done something for someone who will never be able to repay you. Ruth Smeltzer
It is what it is 'til you change it.
In order to determine FMV you need recent comps of similar properties sold recently (3 - 6 mo), close to the property (distance depends on where the property is located, city or country). If you don't have a realtor that you can get comps from, you can use Trulia or Zillow, but make sure you use SOLDs, not listed properties.
There should be information on here that details how to calculate the FMV.
... Verses: 35 "but those who hope in the Lord will renew their strength. They will soar on wings like eagles; They will run and not grow weary, They will walk and not be faint." Isaiah 40:31 ...
take a contractor w/you to look @ house for estimate on repairs
get comps on sold prices in the area-
check rent rates
even if she paid $200 @ tax sale- she can sell it for whatever she can get
your concern is to a get a good deal for you
Mike
https://tvallc.isrefer.com/go/RehabLite/renvestr/ Free tools
Like Mike said take a contractor with you if you can and everyone these days needs to check to make sure all the copper hasn't been stolen from under the house. As in all the waterlines and wiring scrap copper is bringing so much now people don't mind getting dirty to get it. Good Luck.
First off, way to take action!! This is how to learn this business.
Like Mike said, you should not base your offer on what the seller is making. If she paid $1.00 for it and sells it for $50,000 it should not matter to you as long as YOUR numbers work for you.
Like others have stated above, chances are there is something wrong. Like extensive repairs, title issues, judgments or the area is bad with a high average DOM and falling property values. But who knows? You won't know until you do your research. Could be a good one.
So determine what the actual ARV is based on sold, currently listed and currently under contract comps. Solds show you history, listed and under contract show you today's market and what your competition is. Then get an estimate on what the property needs and the cost to bring it up to your projected ARV. Base your offer on the real numbers. This is how you evaluate properties!!
When you are done, make an offer if you decide it will work and on to the next! Repeat at least twice a day!
Even if this one turns out to be a dud, it will be a great learning and team building opportunity for you.
You are TAKING ACTION!!!
Good luck,
Michael Mangham
Mentoring/Team Building Nationwide
MD Home Acquisitions LLC
Knowledge is power, but execution trumps knowledge. Tony Robbins
http://www.mdhomeacquisitions.com Seller site
http://www.mdhomeacquisitionsbargainhouses.com Buyer site
http://www.mdhomeacquisitionshousehunter.com Bird Dog Site
http://www.mdlodeals.com Tenant/Buyer site
said it all. It does sound like their is some kind of problem, you also mention that it has been broken into. Just make sure you can resell this in the area as well.
www.tw4homes.com website
https://tvallc.isrefer.com/go/RehabLite/reigirl/ FREE SOFTWARE FOR WHOLESALERS, REHABBERS AND AGENTS! Present professional looking deals to buyers and lenders as well as run your numbers and get the ROI.
Many people have asked me how to find and qualify buyers using craigslist or other classified sections. This also works for buyers you meet at investment clubs, or buyers that you see who placed bandit signs.
This is a word for word script that I use to qualify the buyers, but more importantly, a great way to make yourself an asset to the buyer and to give them a huge desire to work with you.
Hope this helps.
When I am either calling an investor/buyer off of a Bandit Sign, or off of an Online Ad I use the following script to help the conversation flow. I use this script because most new investors are scared to death to call buyers and feel uncomfortable asking someone so many questions without having a relationship with them. Plus this script puts a new investor in a position of being an asset to the buyer immediately!
Here is how it goes….
“Hello, my name is Matt and I saw your ad on [craigslist] or [your bandit sign] that said that you buy houses. I take it you are a real estate investor right?(Investor usually answers “Yes I am”.)
Great! I am a real estate investor as well!!!
Question #1
“Tell me, do you have any properties that you are trying to sell at this time?”(I am hoping that they say “Yes” as well.)
At this point if the buyer asks me “Why are you looking to buy properties right now?”
Then I answer by simply saying, “I am always looking for great deals!”
If the investor/buyer says that they do in fact have a property or multiple properties that they are selling I will ask them to describe these properties to me.I know that if someone does have a property, they are going to give me details on the properties. As investors are creatures of habit, it is likely that as they describe this property, they are really describing the type of properties that they buy as an investor.
So I take notes on the property as they describe it to me. I want to find out as much as I can about the property specs, the neighborhood, as well as rehab that they have done to fix up the property.
After they describe the property to me I will ask them the second question.
Question #2
“I am always looking for great deals and occasionally I come across deals that I am unable to close on. However, I work with other investors who may be able to close on these deals. If I show your property details to one of my partners, and they are interested in it, would it be okfor me to share your information with them?”
(Of course they are going to be ok with that. I am bringing them a potential buyer and I have become an even bigger asset to them.)
Now here is when I ask them the final question and “seal the deal” to get them on my Qualified buyers list.
Question #3
“As I mentioned before, I am always looking for great deals. If I were to come across a deal that fit the criteria that you just described to me and I wasn’t able to close on it, would it be ok for me to shoot you the information on the property to you?”(Again, I just became even more of an asset to them, and I now have a qualified buyer that I can send properties to!)
Three simple questions and I have a good solid qualified buyer to add to my list.
Happy Investing.
Matt W.