Jump to content
The forums have been archived and are now read only. Years of great info saved for your reading pleasure. Thank you! Visit us on Facebook: https://www.facebook.com/NakedInvestor/ ×
The Naked Investor Forums
Gary (MO)

Ca A 'handyman Special'?

Recommended Posts

Hi everyone,

My marketing brought in a fellow who is living in his new house and seems motivated to sell me his 30 yo house with "foundational issues". He's supposedly had two contractors in to look at it and they tell him that it would be a simple thing to jack up the houe and replace the supports for the "I" beam. One estimate was 5k and the other was 10k. Roof is 9 years old. He says the stool in the main bathroom (4/3 with finished basement and garage) needs a new wax ring (has been leaking).

 

Numbers: Alleged appraisal last year in "as is" condition was 130k. Allegedly ARV is 150k. His loan payment is around 750 per month and he owes 75k. He says he'd like to get close to 130 but I'll bet he'll go quite a bit lower to get out fron under it.

 

As I went to bed last night I was thinking I might pass on this - not being a rehabber - but then I got to thinking, I wonder how well this might be as a CA? Any thoughts you guys/gals have would sure be appreciated!

 

Thanks!

 

Gary

Share this post


Link to post
Share on other sites

Still in the game, eh Gary? Good for you, Doc! I don't like major issues, such as foundation problems. If I have a clunker on my hand like this one, I'm definitely doing it as a CA. Too many potential liability issues down the road for me.

The key is to make the numbers right. Meaning acceptable to the market place because you want to move this property ASAP.

There is a similar line of thinking in this post from Mike Pine.

Share this post


Link to post
Share on other sites

It's interesting that Mike is considering selling the handyman special at above arv...is this realistic?

 

I'm supposed to call this guy back this evening after 4:00 and I'll offer the CA approach to him and keep you posted.

 

Thanks MC!

 

Gary

 

PS I haven't forgotten.... ^_^

Share this post


Link to post
Share on other sites
It's interesting that Mike is considering selling the handyman special at above arv...is this realistic?
Depends on your local RE market, and the specific property, Gary. You want to market the property aggressively, and get the ol' phone ringing. Once the people start talking with you and viewing the property, then you'll know if you have a shot at getting your asking price. Remember, you can always come down if need be. But, by and large, you'll be surprised how readily t/b's will pay top of the market price if you are giving them sweet terms: no qual, low down, generous rent credits, and the luxury of time.

Share this post


Link to post
Share on other sites

What are his realistic expectations to get from the house? If in-fact it is worth 150k and he will take 130k market for 150k and give an incentive of 8k off (for foundation fix) if they can close in the next couple of days. You get 5k-7k and an extra 5k to the owner (who might give you a good referral). Just remember to instill a sense of urgency in the t/b….I like you, I will do this for you, remember 1st come 1st serve or Have someone call you every fifteen minutes and make like they are a buyer, even a second call something like this…yes Mr. Smyth it is still available <pause> your wife will be with you this time great, Thursday (I like to give about 48 hours) at 6 mmmm can we make it 6:45 (I change the time to 6:45 to make the conversation more real sounding). I signed a t/b one time to a harder to sell house that same evening with this technique.

Share this post


Link to post
Share on other sites

I am not trying to get above market, i am actually offering it at a fair market value for a fixer upper. If the right people move in and put in the sweat equity that house will be worth 260k or so.

 

Mike

^_^

Share this post


Link to post
Share on other sites

Looks like it's not gonna fly...this guy said he really doesn't want to fix the foundation (or doesn't have the money) and apparently that must be done before the house can be occupied. It would probably be a good rehab for somebody....

Share this post


Link to post
Share on other sites
Looks like it's not gonna fly...this guy said he really doesn't want to fix the foundation (or doesn't have the money) and apparently that must be done before the house can be occupied. It would probably be a good rehab for somebody....

 

If anything, why don't you get it under contract and flip it to a rehabber for a few grand? It sounds like it would be a win-win situation for the homeowner, rehabber, and you.

Share this post


Link to post
Share on other sites

You're right Brian but I don't know anyone in the KC market yet. I need to join a re club and network and get some contacts. Thanks for the input - and thanks to every one! Hope your deal works out Mike!

Gary

Share this post


Link to post
Share on other sites
You're right Brian but I don't know anyone in the KC market yet.  I need to join a re club and network and get some contacts. 

Gary,

 

How about calling the fsbo ads in the paper that say something like "owner financing" and "completely remodeled?" Lots of those ads are investors.

Share this post


Link to post
Share on other sites

Don't blow this one off just yet, Gary. Get it under wraps with a simple Pure Option Agreement, for example. Lock in the best price you can get, with sixty days or so. Then begin to market the heck out of the place. You'll find someone who will take that option off your hands for a few grand. The seller unloads his property, the end user gets the deal he is looking for, and you pocket a few thousand dollars for your effort and smarts.

Share this post


Link to post
Share on other sites

What about a ca for a rehabber just lock in a low price

Share this post


Link to post
Share on other sites

×
×
  • Create New...