Cash Offer / Refinance

[Michel Benchimol]

Hey guys !

I am currently looking at a property(sf) right now going for 750k the house was build 1931 on CBS and has a new roof . Although the property has a good bone it needs a big renovation (100k-200k) . The comps in the area are good , renovated houses are selling for 900k and new construction homes for 1.3m to 1.5m.

My question is ?

I’m willing to do a cash offer on the property but I don’t know how much of an offer should I do .My feeling is from 550k to 635k for a cash offer . Does that make sense ?

And after that I would like to do a refi with a mortgage lender. Is that possible?

Thanks guys and be safe.

[Joe Villeneuve]

What do you base your "feeling ...from $550k - $635k" on?

70% of $900k is only $630k, which would be the max you could refi.  You said you estimated $100-200k in rehab (where di that number come from?), which for a house built in the 30's is probably very low.  If you subtract $200k from $630k, you end up with only $430k.  So, if you wanted to get all of your cost (rehab and purchase) back from a refi, you can't offer more than $430.

If you are wanting to have this as a rental property (LOL) there is no way you will CF at that price unless the rent was at least $3500/month or more.  

With incomplete numbers (estimates count as incomplete), there is no way of telling if this property has any chance of saving as a deal.  In other words, there is no way to judge what an max offer would be, but I bet it wouldn't be any higher than the mid $300k's.