CA on a house that needs work.

[Steve Morton 0]

I found a guy via FRBO who has a rental property that he wants rid of, and he is open to doing a CA on it.

 

The house is now vacant, and is located in Ontario. He lives in Vancouver. So he's definitely motivated.

 

The only concern I have is that he mentioned that he's in the middle of renovating the main floor.

 

He told me that he's willing to finish the work on it first, and then do the deal, but I was wondering if I should just sign it up now since I have no idea how long he'll take to do it, and maybe I could advertise it as a handyman special like I see a lot of you guys here doing. What do you think?

 

I'm still waiting on the comps, so I don't know the exact value of the house yet, but when I do receive them, how should I price the house? Do I price it at ARV and then tell the tenant/buyer that they'll receive a killer rent credit for doing the work?

 

What about the rent, should that be slightly higher than top of the market, or do you price it differently with a fixer upper?

 

One last thing, we would need to sign the paperwork via fax, are there any pitfalls I should be aware of doing it this way?

[Jonathan RexfordFL 8]

Back into it. Determine what seller wants. Ad repair cost plus what you want in the deal. Sell it for the total amount including your money. If seller wants 100K and it needs 10K and you want 5K write it up for 115K. TBer executes a note for 10K for repairs and you get cashed out. When he goes and gets a loan he will have his equity in the property VIA fix up.

[MichaelC 160]

He told me that he's willing to finish the work on it first, and then do the deal, but I was wondering if I should just sign it up now since I have no idea how long he'll take to do it, and maybe I could advertise it as a handyman special like I see a lot of you guys here doing. What do you think?

Steve, it would be better to get the paperwork signed and the deal under wraps now, rather than wait. Then you can begin to market and show the property to prospects, explaining that the floor renovation is in the midst of completion. In the meantime, with the homeowner as motivated as you say, get on him to finish the job. Tell him a few prospects have looked at the house and were wondering about the floor. That ought to light a fire under his butt to get it done.

On the other hand, if both you and the homeowner agree that the t/b can do the fix up, then take that approach and get to work marketing the property as a Rent-To-Own fixer. Either way, decide the approach you want to take and get the deal signed up. With the homeowner across the country and the property sitting vacant, I can't imagine he's going to dawdle.

[Steve Morton 0]

Ad repair cost plus what you want in the deal. Sell it for the total amount including your money. If seller wants 100K and it needs 10K and you want 5K write it up for 115K.

I'm not sure this is a viable option for me Jonathan, I have no idea how to estimate repairs.

 

with the homeowner as motivated as you say, get on him to finish the job.

 

This is most likely my best option, he did say he was willing to complete the work. However, he mentioned that he was going to be traveling until the end of May, so who knows how long this guy will take to actually complete it.

 

Should I just go ahead and try to find a tenant/buyer for ARV anyway?

 

Thanks guys.

[MichaelC 160]

Should I just go ahead and try to find a tenant/buyer for ARV anyway?

Sure. You'll have to put in writing, though, what repairs will be made before the t/b is expected to take possession.

[Steve Morton 0]

I'm still waiting for comps!

 

I hate Realtors!

[Doug Pretorius (ON) 9]

I'm still waiting for comps!

Just sign it up for the best price you can get. The market will tell you if it's overpriced.

[West Coast Girl 1]

I'm still waiting for comps!

 

I hate Realtors!

 

That's the difference between an "investor" and an INVESTOR! One who belongs to the 'Boys' Club' like me. You need to prove CREDIBILITY. And, the ONLY way you can do that is to hook up with Real Estate Agents who UNDERSTANDS investors and also belongs to the same club, such as ME!

 

That's why I LOVE my Real Estate Agent. He literally provides me with comps within hours of my request (eventhough he's extremely busy as he's the TOP agent in my area -- BONUS). Because he's not only a Real Estate Agent, he's also an INVESTOR so he understands that time is of the essence! He even puts on a course for newbies. (I honestly don't know where he finds the time time to do that, but he does -- 3 times a year)! However, this is how he also builds his investor / buyers' list. BRILLIANT move in my opinion!

 

Oh, by the way, I also get those elusive EXPIRED LISTINGS too! Woo, Hoo! :

 

The point I'm trying to make is, if you want to be taken seriously and to get an immediate response, you MUST belong to a REPUTALBE REIClub!

 

Cheerio!

 

WCG!

[happyardy 0]

Oh, by the way, I also get those elusive EXPIRED LISTINGS too! Woo, Hoo! :

 

Just curious, does a realtor risk his licence if it is found out that he/she has been sharing expired listings? Something to do with Privacy act ? Is it illegal ? I met a couple of realtors but I was afraid to ask them about expired listings upfront.

thanks

- Rahul

[Doug Pretorius (ON) 9]

Rahul, the realtors I've asked for expired listings acted like I was trying to hire them for a hit

[MichaelC 160]

Rahul, the realtors I've asked for expired listings acted like I was trying to hire them for a hit

I've warned you about Realtors named Tony. . .

[Steve Morton 0]

Alright, so I now know the property is worth between 270K-290K.

 

The guy says he'll do the work himself on the main floor. As well as bring the rest of the house up to par.

 

However, he says he doesn't want to finish the work needed in the basement, including installing the bathroom down there.

 

He mentioned to me that he liked the idea of marketing the place as a handyman special.

 

So my question is, should I still market it as a HMS, even though it's just the basement that needs work done to it?

 

Also, the guys says he won't be back until the end of the month to finish the job. So in the meantime, can I still find a T/B and just write in the contract that they take occupancy when any necessary work is completed if it's not marketed as a HMS?

 

Or if it is a HMS, I write in the contract that they have to complete the work on the basement right?

 

Any suggestions on the price I should charge for either scenario? The market is very strong.

 

Thanks

[MichaelC 160]

Steve, under promise and over deliver. In other words, advertise it as a handyman clunker needing work. When people show up, they are going to be pleasantly surprised at how little work needs to be done. Perception is reality. And if they went in expecting a disaster, but instead found a house needing a little spit and polish, they are going to whisper amongst themselves that you're a fool and the deal is a bargain.

Also, the guys says he won't be back until the end of the month to finish the job. So in the meantime, can I still find a T/B and just write in the contract that they take occupancy when any necessary work is completed if it's not marketed as a HMS?

Since the house is vacant, make it available immediately, with an addendum that specific repairs will be made by a certain date.

Or if it is a HMS, I write in the contract that they have to complete the work on the basement right?

That's up to the parties involved. What does everyone involved want, and what are they willing to agree to?

Any suggestions on the price I should charge for either scenario? The market is very strong.

Far be it for me to say, Steve. I'm far removed from your market.

[Doug Pretorius (ON) 9]

Steve, under promise and over deliver. In other words, advertise it as a handyman clunker needing work. When people show up, they are going to be pleasantly surprised at how little work needs to be done. Perception is reality. And if they went in expecting a disaster, but instead found a house needing a little spit and polish, they are going to whisper amongst themselves that you're a fool and the deal is a bargain.

Truer words of wisdom were never spoken. That right there is pure GOLD! Everybody does exactly the opposite, they try to downplay the flaws and they end up with a bunch of people whispering: "Can you believe they want that much for that dump?"

[Steve Morton 0]

This guy went with a property management company instead of me because he thought they would be able to handle it faster than I could.

 

Just for future reference, how can I convince a seller to go with me over property management firm?

 

Isn't what were doing kind of like a property management business in a sense?