I just bought a property for $15k. The Tax assessment for its current condition is $63k. Six months ago a house on the same street sold for $68k. It needs some interior paint, floors refinished, and cleaning. Did I make a good deal? This is my first investment property. What would be a good wholesale/flip price?
2007-09-26 16:15:31 · 12 answers · asked by Anonymous in Business & Finance ➔ Renting & Real Estate
Well, first let me tell you that just because the tax value is $63K, does not mean that's the value of it in it's current condition. It could have been assessed before it got into the condition it is currently in. NEVER use a tax value as a way to figure out what a property is worth. And NEVER use zillow.com (what a waste of a website). You need to get an appraisal done "as is", and a "subject to repairs" by a LICENSED appraiser. Don't let the seller tell you what it's worth, they are trying to sell you something!!! And most lenders only go back 90 days for comparable sales with the market the way it is now. 6 months is too far back. Did you have an inspection done before you bought it? Do you know how much the repairs are going to cost? These are very important questions to get answered before you buy something. Most importantly, the answers need to come from a 3rd party that has no "interest" in the sale of the property. If 1 house sold for $68K, and 10 houses sold for $45K, it's only worth $45K. You should always have at least 3 comparables to support the value, and they should be within 0.50 miles of the subject property. If you are wanting to wholesale properties, you need to find a buyer BEFORE you close on the property. On a lighter note, I do have a list of buyers that buy wholesale properties. E-mail me details on the property, and we can get further into discussing the deal. sulrich@firstdecisionmtg.com is my work e-mail (best place to catch me).
2007-09-26 22:04:00 · answer #1 · answered by Shawna Marie 3 · 0⤊ 0⤋
Yes, it is.. if you can turn it over or 'flip' it. The house that sold for $68k, what it similar in design to your purchase? Same insides and square feet? Backyard with pool? Just because a 2 story, 3 bad, 2 bath sells for $350k, doesn't mean your 2 story house will sell for the same amount.
As your first investment property, I applaud you taking the risks and realizing the potential. Now you just have to understand the market and make sure this house goes up for sale in a few weeks, maybe a month. Flipping is fast-paced, don't hold on for too long. If it doesn't sell within 6 months, expect to hold it even longer. As of now, with people failing to payoff mortgages, it's a buyers market. So be weary. As for price, I would list it around $65, comparing the features of the other house. More if it's nice, less if it's not. Always be willing to negotiate. You're there to make a quick profit, not turn potential buyers away. Good luck!
2007-09-26 23:31:07 · answer #2 · answered by james24 3 · 0⤊ 0⤋
Tax assessments are almost always way off, either high or low. If yours is accurate, it's probably just a coincidence. You need to have a realtor pull you some comps (it won't be hard to find one to do it for $20 or so), and physically drive by and look at what else has sold as close as possible to your property that are similar in size and appearance. Next time it would be a good idea to do that before you buy. For now, once you've determined the value of the house in excellent condition, you wholeseale price would be determined by taking the after repaired price, multiplying by 0.7, and subtracting the dollar cost of the needed repairs.
2007-09-27 08:48:45 · answer #3 · answered by gimbutis 2 · 0⤊ 0⤋
Congrats - hope the home doesnt need a new foundation, or maybe a new roof etc ...
But if its just minor stuff, then it really is a good deal
then again why would people sell for $15k if the home is valued at around $68k right?
makes sense?
2007-09-27 00:42:14 · answer #4 · answered by Anonymous · 0⤊ 0⤋
The answer depends on how much it will cost to make the repairs and how long it will take to do them. After all, while you are making the repairs you are losing money. the faster it is done, the better for you.
For me, I'd do the repairs - as long as they are reasonable, and sell it for about $62k
However, if the repairs aren't too expensive, you are likely to find a rehabber who will buy it for around 50% ARV - or about $32k - so you could wholesale it, make a nice $17k profit - and not have to do any of the work.
So sounds like a good deal.
2007-09-27 00:09:00 · answer #5 · answered by rlloydevans 4 · 0⤊ 0⤋
Now that's a pretty silly question. A house is going to make you 200% profit and you want to know if you got a good deal?
If a similar house sold for $68,000 then this one should be the same. If you want a quicker sale, list it for less. The lower the price the quicker the sale.
2007-09-26 23:25:39 · answer #6 · answered by RealtorV 3 · 0⤊ 0⤋
It sounds like it is, but the only way to find out what your profit margin would be to actually sell it or get a market analysis by a realtor to find out what the value of it would be. If it is worth 68K, take the money and run.
2007-09-27 10:15:27 · answer #7 · answered by bpl 5 · 0⤊ 0⤋
It sounds like it is an amazingly great deal. As long as there are not structural problems then you cant lose at that price. Congratulations!!!
2007-09-26 23:26:51 · answer #8 · answered by young2bballin 2 · 0⤊ 0⤋
It sounds like you got taken. But being a big hearted guy, I'll help bail you out before you really lose your shirt. I'll give you $8,000 for it so you only lose a little:)
2007-09-27 02:13:58 · answer #9 · answered by teran_realtor 7 · 0⤊ 0⤋
It is a good deal if you can sell it for a profit. You make your money when you buy real estate, not when you sell it.
2007-09-26 23:21:54 · answer #10 · answered by uprightreservoirhunter 1 · 0⤊ 1⤋