First deal about to happen, HELP a NOOB

[Skeeter]

Found a foreclosure in Harris county Texas that I want to flip.  Here is what I have done:

1. Inspected the property, and neighborhood and looks like a seller if I buy the property "right"
2. Ithas some foundation work that needs to be done and have an setimate
3. I have a hard dollar esitmate on the rehab, plus a retired contractor to check the bids.  THE HOUSE HAS EXTENSIVE INTERIOR DAMAGE.
4. Meeting with realtor tomorrow to possible sign the contract
5. We have the comps

QUESTIONS:  ???

When buying a foreclosure I know I am buying "as is".  Is there anything I should put the in contract other than getting it financed?

The house is listed at $ 66,500.  My rehab cost will be $15-17K.  I havn'tgot the hard money cost just yet and was wondering if you guys had a ballpark working estimate.

I have a number in my head that I want to offer for this repo, but was wondering what you guys'gals would think a good starting number would be.

It's a single family/3-2/1100 SF/built in '71/will fix up nicely.

I know that I have ot provided all the info you need, but I want to do this first flipper house without too many noobibe mistakes.

Many thanks for the advice and God bless.

[Bmmac]

what is the after value cost once the rehab is completed?

[Skeeter]

$80-94K

[Bmmac]

that's not a good deal for us.
the numbers are too low from the rehab

[Skeeter]

Also, what about liens?  Since I am buying from the bank or mort co. do they have to disclose anything about liens aor clear title?  Help!

[Bmmac]

by the time you finish with closing cost you will have no money left over

[Bmmac]

where are you located?

[Bmmac]

it all depends on your plan our plan is not to hold property until we have at least 500k in our account.

on deals we look to make a min of 5k- up after expenses that's for an assignment deals

flips we are at a min of 20k so you have to have a plan on what you want to accomplish.

[Skeeter]

This deal is for me.  I want to:

Buy the property at $37-40K (listed at 66K)
Put $15-17K in repairs
Pay hard money cost
Then sell it for $89K The comps agree with selling price.

Buy house from lender at $40K
                                         $17K Rehab (firms quotes)
                                         $57K invested
Sell for $85-89K less hard money costs.

Doable?
 
                                         

[Skeeter]

All of the above assumes that I can buy this house at $40K ish.

[Bmmac]

pOOOOO that's different if you get it at 37k then it's a great deal cause your after market value will cover the cost of expenses...i didn't have that info before.

[NoMore925]

Did you say it needs "foundation work"??

Whats wrong with the foundation?

[Skeeter]

My contractor says it needs about 20 piers at $100 each.  Very common in S. Texas.  The company gives a lifetime warranty.

I also wonder what my chances are of buying this "dog" at say $37-40K when they have listed it for $66K .  Any experience or rule of thumb?

Many thanks!  You folks are great.

[Mr.fancypants]

Hi Skeeter,

I checked over all of your math and it looks like a good deal, but it all depends on whether the bank will dump it for $37,000. That's a big what if. My gut feeling is that they won't. Just ask them how long it's been on the market. If they're desperate to sell, they might accept a low ball offer. If they're not motivated, they'll probably laugh at you and make a counter offer. Either way, you need to run the numbers so that you know what your maximum bid is (your limit) so that a profit margin still exists.

[Skeeter]

Thank you for the reply!

I was thinking that we could make money even if we paid $40-43K for the house.  I may offer $40K to start.  The days on market are 98.  

Do you have any idea what some hard moey cost would be for my equation?  

Many thanks for your expertise.