Need help on 1st deal - quick resale in Los Angeles

[Antje Klatte]

Need help with transaction in Los Angeles. Offer trip to highest building in the world (Burj Khalifa in Dubai) in return for successful resale!

Transaction details:
PROPERTY
* SFH in Beverly Hills/Hollywood Hills area
* 4BR/3BA, ca. 2,700 sq.ft. (ca. 6,200 sq.ft. lot)
* Spanish style house build in the 1920's
* private pool
* in good condition, though basic, old-fashioned style => very good potential for turning it into a gem through refurbishment
* MLS listed

FINANCIALS
* offered at USD 1.075m, though likely to sell for USD 1m (maybe even lower as seller is highly motivated and doesn't want to do any refurbishment work)
* comps in the area (0.5mi radius):
= similar house (also 1920's, no pool) sold for USD 1.349m (LP USD 1.39m) end Feb'10
= 2 similar houses but build after 2005 sold for USD 1.9m (LP USD 2m) early and mid March '10

I want to make an offer on the house for max USD 1m and put it back on the market for USD 1.1 - 1.2m for a quick turnaround.

Since this is my first transaction, I'd be highly appreciative if someone experienced could lend me a hand and guide me through this, especially on the funding side and working virtual (based outside US but have reliable helping hand on the ground in LA).

Looking to make an offer before 22 April 2010.

Have can-do attitude and am highly motivated to get my real estate business off the ground, eager to learn the trade.


Thanks!
Antje

[Matt Eilers]

Few items sounds troubling.

It is already MLS listed at $1.075M.

How long has it been listed at that price?

Your comps state that you think the home should be of more value, but if the home has been on the market for awhile at that price, the market says otherwise.

What will be your monthly carrying costs?

If rehab, how long (conservatively) do you plan for this to take?

Rehab budget?

What is your estimate for days on market once the property does hit the market + the time it is under contract and waiting to close?

Is this a rehab or how do you plan to get a property that is not currently selling at $1.075M to have a quick turnaround for $1.1-$1.2M?

How do you intend to sell?
FSBO (from Dubai?) or with an agent?

If this does not sell at your intended price and assuming you have high monthly carrying costs, what is your fall back position to offset the high monthly mortgage (long-term rent, or can you financially whether it)

Let's say you bought for a $1M.

If you sold for $1.1M, I see little to no profit potential by the time you factor in carrying costs, rehab, closing costs, agent commissions (i assume you will be hiring an agent and thus paying them).

$1.2M- eh, still ~$70K going to an agent (assuming 6%), rehab is the big variable here as well as how long it will take you to sell and what your closing costs are.

Maybe some more info. on how you are taking a property that is MLS listed for $1.075M that is still on the market and doing a quick turnaround for $1.1-$1.2M.

The numbers make me a little leery on this one. Profit potential seems rather small once everything is factored in for taking on the financial risk (not selling and now paying montly mortgage) of a $1M home.