I'm not sure why exactly I picked this house, but I'm going to be making an offer on the Mt Pleasant property.
As you may recall it's an Estate property (ties in nicely with the whole probate thing I'm going after). Has been on the market for 45 days, not long but they have already dropped the price 30k from the original asking price of 369k. So that is a sign of motivation I would say. The property is a very big lot that a larger house (which tends to be the thing in my town) could be built on.
So those where the reasons. I'm going to go drive by it today on my way home from work and then I've got to sure up what the ARV would be in that area of town. My educated guess would be 360k for a 3/1. So breaking that down into an MAO...
arv(360,000) * .60 - repairs(70,000) - Profit(5,000) = MAO(141,000)
the biggest question that I have no idea about is the repair costs. That really depends on what my buyer wants to do with the house. If they want to knock it down and build a 600k house or if they just want to repair the place and maybe add a bathroom. I guess this is why it's so important to know your buyers.
Anyone have any suggestions on what to do about estimating repair costs? Houses that have had old people living there, in my area, always seem to need the bathrooms and kitchens, flooring and painting completely redone.
So that is where I'm at today. I've got to re look at my goals for this week to make sure I'm on track.
Later
http://sjcostello.blogspot.com/2009/06/i-will-offer-on-this.html?showComment=1245707943315#c3367233121159322162'> June 22, 2009 at 2:59 PM
Looks like a beautiful home.
http://sjcostello.blogspot.com/2009/06/i-will-offer-on-this.html?showComment=1246647644486#c788488391897858897'> July 3, 2009 at 12:00 PM
Scott,
Good luck with this property; hopefully everything will work out.
I'd suggest that before you make the offer, you determine exactly why you picked it though. Is it better than the other three that you were considering. If so, define "better" (i.e. more potential, greater profit, more likely to sell quickly, etc...)
I'm a strong believer in managing your expectations and goals rather than "hoping for the best."
http://sjcostello.blogspot.com/2009/06/i-will-offer-on-this.html?showComment=1246900793607#c7246704965762156387'> July 6, 2009 at 10:19 AM
How about - this!!
Usually a good way to figure out repair costs is 10k, 15k, 20k, 30k, total rehab 40k
also you can go high end to be safe or double check with a per sf method.. low end 8-12 dollars per sf or for higher end 13-25 per sf..
always round up to higher number.. If you get it done for less this can be additional profit for you or your buyer/ investor
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http://sjcostello.blogspot.com/2009/06/i-will-offer-on-this.html?showComment=1247982225176#c165737618188351122'> July 18, 2009 at 10:43 PM
Interesting, I have been around this game for a while. Help me with your formular, what do the abbreviations mean?
http://sjcostello.blogspot.com/2009/06/i-will-offer-on-this.html?showComment=1248104156172#c3701444943887696209'> July 20, 2009 at 8:35 AM
Richard,
I saw your comment but have moved my blog to a new site (http://www.strugglinginvestor.com) so I appologize if this reply is late...
ARV = After Repair Value
MAO = Max Allowable Offer (what number I won't go over)
-Scott
http://sjcostello.blogspot.com/2009/06/i-will-offer-on-this.html?showComment=1262029444135#c1351508954351374200'> December 28, 2009 at 11:44 AM
seems like an interesting property.
http://sjcostello.blogspot.com/2009/06/i-will-offer-on-this.html?showComment=1262752530300#c7347189447482432167'> January 5, 2010 at 8:35 PM
Your house looks great! You shouldn't let them cut 30k from its original price, as you said the property is huge. Try to put it on auction.
http://sjcostello.blogspot.com/2009/06/i-will-offer-on-this.html?showComment=1277284940765#c775746345544357138'> June 23, 2010 at 2:22 AM
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