My husband and I have been searching our small town for good deals. Things here in Montana are rather backwards. Everyone believes you should buy a house, rent it for a loss, then, in a few years, sell it for a substantial profit. I, unfortuantely, can't subscribe to that way of thinking! So, I finally found a realtor that is investment minded and he is doing an amazing job helping us out.
The property: 3 bed, 1 and 3/4 bath, 2400 sf, 2 city lots built in 1942. It has 1200 usable sf in the basement with one room that was being used as a 4th bedroom. It was built in 1942, but all the electrical, etc. have been brought up to code. The garage is an add on and needs some work, but it's a one car attached.
Here is the offer we just made today. The sale of the house is somewhat like an estate sale so it will have to be approved by the lawyer over seeing the property. It was appraised at $169,000 in "as-is" condition. This is our offer:
$141,250 purchase price
40,000 repair/cosmetic costs
3,500 loan fees
3,400 carrying costs
Total cost: $188,150
The market is soft right now but the list price, when complete, will be between 270k and 315k depending on the finished product.
So, our profit will be between $81,850 to $126,850.
We expect the sellers to counter, but we have already set a top price of $160,000. That will still give us a profit between $63,100 to $108,100.
The FSBO's are few and far between out here so having an excellent realtor has made a huge, HUGE difference in our ability to invest. So, a word to all those out there with a realtor who is not performing, find another one! I feel like I'm in a whole new world with this realtor.
I'm pretty excited because this flip is going to be a family venture!