What would you do?

Question

Situation, have contract for an REO asking price was 148,000 it was an Auction and I was the  winning bidder at 100,000.  Realator calls me and says he has a buyer willing to pay me 140,000  cash the day I close.  The house is a mother daughter needs a little cosmetic work house sold in 2007 for 398,000.  What would you do keep house rent it out and hold for a year or take the forty thousand or ask for more.  Just wondering everyone thoughts.

Pat L. · Answer

you can NEVER lose money taking small profits

Adam P · Answer

Well it looks like a deal has been made at 175,000.  I felt this was a great deal and if if falls threw then I just live there as planned.

David Krulac · Answer

1.  You never lose by taking a profit.
2.  The amount of work, time & money required always exceeds your expectations.
3.  Holding costs are often given little consideration, things like taxes, insurance, utilities, cutting the grass, while you wait for that right buyer.
4.  If you are looking to sell in 6 or 12 months from now, you don't know what interest rates will be or what the market will be in your area at that time.

Joel Owens · Answer

We have a saying in real estate " Pigs get fat and hogs get slaughtered "

I personally would take that money and move on. The first offer isn't usually the LAST OFFER from a buyer so get them up higher.

You can roll the dice and see what happens down the road but nothing is certain like the cash buyer today.

My mom who is almost 70 years old is the most honest and practical person I know. She keeps me grounded and thinking clear on things.

One of her favorite sayings is " A bird in the hand is worth more than two in the bush. The two in the bush might be gone and have flown away by the time you get there."

Andy Chu · Answer

I would take the money now and find another property...

Adam P · Answer

Been a while, but deal went threw with no problems

Adam P · Answer

Again Thanks all,  Again this was going to be for me to live in with my brother and all these offers starting coming.  I want to live in it this way I can take equity out and buy another property if it presents itself.  Also when i am ready to move on, it will be a great rental.  Now with that being said I can be a hog because its not my intention to sell in less the price is right for me.  Again thanks to everyone that posted I am grateful.

Adam P · Answer

Again thanks to all, Joel I liked the pig comment very funny.  When we went to buy this property the intent was to live in it and have my brother live in the other part.  Then with these quick offers it was like wow.  The most recent was from another guy for 148,000 and he would pay brokers fee.  So I will let all you know what happens.

Mark Ferguson · Answer

My goal is to create passive income that I can live off without working if I don't want to work.  Part of that strategy involves buy and hold as many properties as I can.  I could easily flip a lot of the rentals I currently hold, but then I would stop receiving income, lose my tax benefits and stop the mortgage pay down process.  True I would have more cash when I sold, but I have to pay taxes on that cash and after expenses it's never as much as you think it will be.

The way I look at it, he already has a bird in hand. He needs to put that bird in a cage and feed and nurture it.  Find other birds he can put in the cage who will mate and create new birds.  Eventually if he finds enough birds he will have a sanctuary he can retire off of.  Or he could sell the bird now for a profit and just deal with buying and selling one bird at a time.

That's just my philosophy, we all have different goals and dreams.

J Scott · Answer

If you only put $10K into the rehab, don't expect to be able to sell it to a financed buyer for anywhere near $240K for at least a year.  It won't appraise for anywhere near that...

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