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Those are the numbers I usually use (70% – repair). When I spoke to my PI’s none of them knew the deal spread…they only said they had no $$ to put into deals right now.
I have done a few deals with my PI’s at these type numbers. I am obviously not trying to make a killing on this deal. I think that 9% is a good return on $157,500 ($13,750). At 12% simple for 90 days it would only be $4725.
I WILL be the seller to end buyer.
Patrick
Sure. You never know where you can find a private lender. Plus we may be able to help you restructure the deal so a private lender is not needed.
Jackie
Thanks.
Here is the deal. Owner wants $160,000 CASH. I am planning to offer $150,000 and close QUICKLY. ARV is $200,000 and was comp’d by real estate agent, who BTW brought me this deal so I have to give to him to sell. He also has interested party at that price.
House needs minor fix-up…one window replaced, some minor drywall repair, carpet and paint inside…est. $5000 max. Fix-up time less than 30 days…sale time less than 90 days (this price range is a winner in this area!)
Here are numbers:
Sale price $200,000
Commission 12,000
Closing Costs 3,000 (high)NET $185,000
Purchase $150,000
Closing Costs 2,500
Repairs 5,000NET COST $157,500
Profit $27,500 @50/50 split = $13,750
Worst cast, they accept NO LESS THAN $160,000 the NET Profit approx. $17,500 and split is $8,750.
Let me know.
Thanks
Patrick
Most private lenders will only lend up to 70% of the after repaired value minus the repair costs so that puts the maximum purchase price at $135,000. Many private lenders will not do the deal if you are over 65% minus repair costs.
The seller pays the realtor commission on the sale side, not you.
Perhaps your private lenders would not do the deal because $150k is too high.
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