House #8: First Contract

September 14, 2009 · 3 comments

After several showings of The 16-Bid House over the weekend, we received two written offers, and several other interested buyers…

So as not to extend this deal too long (baby is coming any day now), we decided to try to negotiate the best offer to where we wanted it, and get the paperwork signed as quickly as possible.

The offer we liked best was about $1K below asking, with $900 back in closing costs. It was a cash offer, with a 7-day inspection period and closing on September 25. We countered at full-price (with $900 back in closing costs), a 2-day inspection period, and closing this Friday (September 18). The buyers quickly accepted our counter-offer, and we got the signed contracts back this morning. They have until Tuesday night to do their inspections and back out of the deal; otherwise, we’ll hopefully head to closing by the end of this week.

Assuming the deal goes through at these numbers, we’ll make about $8K in profit. While that sounds like a great deal for a property we’ll have only held for 2 weeks, we’ve had earnest money tied up in this one since March, had to deal with vandalism before closing, and then did a decent amount of rehab prior to reselling it.

So, while I’m certainly not complaining, this deal has been a pain in the butt for 6 months now, so the $8K profit can’t really be considered “free money”…

3 responses to “House #8: First Contract”

  1. ezra says:

    (baby is coming any day now) – uh huh, sure. talk to the hand.

  2. Chad says:

    J Scott,

    I know you said you decided to just “wholetail” this property as you didn’t want to deal with possible fha buyers. Seems that strategy worked well. Wondering how much more work, $ and time wise, would have been necessary to get it to your standard retail state and approximately how much more you would have increased the sale price. From the pics the property looked really nice. I noticed the missing top cabinets in the kitchen and a missing light fixture but otherwise it was much nicer than I was expected based on your description. I’m guessing that based on finding a quick cash buyer they were thinking it was a really good deal.


    ps- hope all goes well with the impending delivery

  3. J Scott says:

    Chad –


    As to your question, we spent $4200 on the rehab and will likely make about $8500 in profit. Had we done one of our full rehabs, our budget (based on bids we had already gotten) was about $15K. We likely would have made between $20-25K in profit, depending on how aggressively we priced it. It would have been an extra 2 weeks worth of rehab effort for our contractors, but as you mentioned, we would be able to sell it FHA until mid-December, and with the holidays, we realistically wouldn’t have it sold and off the books until February.

    Certainly, the extra $15K in profit would have been nice, but we’re not thrilled about having properties sit empty in this neighborhood (there are lots of bored kids), and we didn’t really want to tie up $60K of cash for that long. Plus, we can probably use the cash to do another 1-2 quick wholesale or wholetail deals in that time period.

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