House #15: Wanna Buy It?

January 22, 2010 · 0 comments

The Neighbor House is being sold by Fannie Mae, and in their standard REO contract, it stipulates that the buyer (me) can’t resell the property for more than 20% above the purchase price for 90 days.

In other words, if I try to sell this property for more than $60K, I need to wait three months!

Given that FHA has just gotten rid of their 90-day rule, I have no desire to renovate and hold this property for 90 days before I can sell it (would rather keep my money moving). So, after I purchase it on Monday, I’m looking to turn around and sell it to another investor who is interested in a great rental property or flip project. Though keep in mind that the 90 day restriction applies to the house, so anyone who buys it from me will need to keep it at least until April before you can sell it too!

If you or someone you know is interested in buying it, let me know…

I’m looking to sell it for $60K (cash buyer or at least someone who can close quickly), and in my opinion, the property would make a great rental or a great flip at that price. While I haven’t even turned on the utilities (so do your own due diligence), I’m guessing it only needs about $2K in work to make it rent-ready or would need between $10-30K to make it a flip. I was planning to spend about $20K on renovations, but different people might have different ideas for what to do and not to do.

Of course, I’ll let you do your own due diligence on comps, but keep in mind that The Pine House is right around the corner (same neighborhood), and I’ll need to sell that for $135K to make my profit, so I’m betting on the fact that comps are at least $135K, and hopefully higher. In fact, The Poor House was under contract for $134,900 (and appraised for more than that), and is within a half mile of this house. Also, the house next door to The Pine House just sold in November for $145K. But again, do your own due diligence.

As for rental comps, I don’t really know (I don’t hold rentals), but I’m guessing it’s in the $950-1100 range. Thought that’s just a guess based on some For Rent signs I’ve seen in the area over the past year…

The best part is, if you buy this property, we’ll be neighbors…as I pointed out, we’re just getting ready to start rehabbing The Pine House right down the street… 🙂

Shoot me an email if you want more information or want to see it…

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