Just got a Deal Accepted

Figure out how much work the house needs and how it compares to the FMV. If the house is worse off than projected, and is going to be at FMV after repairs then get a professional contractor to come in and give you a retail bid. Give a copy of the bid to the bank and tell them you want to negotiate a lower price. I would wholesale for $5k or $10k, especially if it has the potential for good rental cash flow. If this is your first real estate deal, keep it simple. Rehabbing is whole different ball game.

When considering new construction, have you looked into the advantages of steel frame construction ? As a weathered veterans of the building trades, I worked in the high end commercial market.
Steel framing is basically commercial style construction. The benefits of steel framed construction out weigh conventional wood frame housing 15 to 1.
You can do things with steel, you cannot do with wood.
Unlike wooden frame housing, steel framing needs no load baring walls to support the structure, plus it is fire resistant.
If you wanted to design a floor plan that would allow you to open up areas, like the see through kitched, Dining and Livingroom area you could easily apply the priniciple ("Less is More.")

If you built two houses exactly the same, in appearence. You could actually offer more options with steel, for about $30,000 less than wood frame construction.
Just a little thought I'd share with you.

Dino.

to gut something is one thing...To have a bad foundation! Is a horse
of a different color.

Randy

Hi Howard,

just reading your post. I have a couple of Q for you:
+ If you didn't know the ARV (AfterRepairValue), how did you determine the amount you offered in the first place? + And why did you make an offer if you haven't even any ARV?
+ How do you usually go about determining ARV?
+ Do you have any experience with gutting houses, rehabbing and/or determining repair cost?

If you need help (i.e. how to determine ARV) just shoot me an email (connywolfram@****), and I'm glad to help you with some tips.

Best,
Conny

Hey, first let me say congratulations for taking action! Congrats on the accepted offer.

One thing I'm a little leery of on offering 1/2 of listed price is that sometimes the asking price starts at a number WAY too high (especially bank-owned. they're pretty ignorant), then 50% off isn't such a good deal. But if you've been watching the property and it gets to a reasonable number, THEN make a lowball offer, you're good to go.
Keep us posted on what you decide to do with this. Run your comps for sure before deciding. GOOD LUCK TO YOU! Exciting!

Rina

I LOVE this post. That's something I'd never thought of for residential. Would you want to start a thread on this so we can ask you some questions?? I know I have a bunch.

Thanks for sharing your expertise!!

Rina

This property that I was watching started way above FMV because of what was owed on the house.They dropped the price at least 6 times until it got down to a reasonable number.

That's what I thought initially, too! That I was to offer 50% of the listing price- but that's not true. As you can see from these replies, the key is to offer 50% of FMV (which takes a little more homework).

http://www.deangraziosi.com/fmvcalc

If i have to gut something, Maybe that is the deal...I do not want.
We are REI,WE buy and sell! Not to re--build.I can understand you may
get alittle...?! Bottom line...Only {COSMETIC}! I know this seems harsh,
Still...There are to many propertys...Available at the current moment!
To be doing "Old Strategy's!
I know about location...Still,there are alot deals to be made!

Randy
"LOVE ME/OR LEAVE ME"

I did my first house I ever owned that way when I was in my mid 20's we kept it 8 years and sold it after I joined the Army. We made over 60,000 on that little house. Let us know how you do on this rehab.

Danny Williams

I just want to be sure that we're doing this right...
The ARV on the property is 100000 to 110000 SFH 4 bed 1.5 bath
We settled at 42000 plus closing costs.
I'm thinking about wholesaling but then again maybe go and rehab it.
Just want to see if I can get any feedback.

Hi Rina:
I have been away from this website for awhile, ( Sorry about that.) But I am back and have every intention of staying in contact with this web-site on a daily basis:

My answer is ( Yes ) to your question about starting up a new thread.
What questions do you have in mind ? ("Fire away.")

Dino.

P.s. When building new construction esspecially in marshy low lying areas, where digging out a full basement may be out of the question.
One of the most viable options I know are Caisson Foundations.)
With Caisson foundations, a number of 36 inch holes are drilled 30 feet into the ground, then filled in with concrete.
Your first floor will more then likely be a slab foundation anchored to the (Stilts.) your structure is standing on.
This way, the ground beneathe your structure could sink or break away without your structure sinking with it.

My areas of expertise are in areas of commercial building. As a retired Union Labor'r my job was always the grunt work of the construction industry and doing
the work that knowbody eles wants to do.

But I have no experience, what so ever, in the areas of investing. Due to the type of work I used to do, I was always on the move, and basically rented a different apartment, every year.

So this is new to new to me. I hope to get as much input as I can about how to structure my first few assignments, and in return, I will be more than happy to extend my areas of expertise to anyone interested in knowing what I know about steel framed construction and ways of cutting cost on new constrction.

Dino.