Wanna be a surgeon? Dissect this deal with me.

[Hermes Kanaris]

Hey everyone, im new to this community but always wanted to be in real estate. Last week I acquired my FIRST wholesale deal! I'm looking around to find some investors to take it from me and just feel a little lost with dispo, i want to make my deals super sweet sugar coated cherry on top for all my investors on my list so what i ask is if you can rip apart this deal for me and make sure i have enough meat on the bone for my investors, below are the stats

First off address, 1011 Richard Bell Ave Perry FL

Purchase price $110,000

Seller says the bank is willing to let go of mortgage for $91,000

ARV $180,000-$200,000

Needs new roof (20 years old) and central ac system went down about a year ago (around 4k for 3 ton ac)

Ive been in roofing for about 2 years and im estimating the roof will cost between 18k-20k

I take constructive and negative criticism very well and i only want to improve, no opinions are unwelcome i want full scrutiny with this deal please.

[Matthew Hull]

What else is there to do on the house? What’s your total rehab estimate? Is this a $25k, $40, $70k flip?

Can you estimate the holding and transaction costs?

If you can get it at less than 50% of its ARV, you're probably in a decent place to sell it to an investor, but it's hard to say without more insights.

[Trevor Finn]

Congrats on your first deal @Hermes Kanaris! 

Let’s break it down with the 70% rule to see if it’s investor-friendly:

ARV: $190,000 (taking the middle of $180K-$200K) 70% of ARV: $190,000 * 0.7 = $133,000
Minus Estimated Repairs:

• Roof: $20,000
• AC: $4,000
• Additional repairs (general estimate for a property needing updates, say flooring, paint, minor plumbing): $10,000-$15,000

Total Repairs: approx. $35,000

Max Buy Price for Investor: $133,000 - $35,000 - $10,000 (wholesale fee) = $88,000

Since you’re getting it for $91,000, you’re close, but to make it irresistible, consider negotiating the purchase price down a bit further. This should make it a cherry-on-top deal for investors!

NOTE: Need to Know: Do the kitchen and bathrooms need updating (if yes, that cost needs to be included and your buy price needs to reflect that additional expense)

[Timothy Franklin]

@Trevor FinnI would agree with your breakdown, but why overlook a potential to run the 91k subject-to with a targeted 6 month hold for flip or 18 month refinance? Unless the seller has to be immediately out of the mortgage I see sub-to as an excellent cost reduction strategy.

[Jay Hinrichs]

Quote from @Timothy Franklin:

@Trevor FinnI would agree with your breakdown, but why overlook a potential to run the 91k subject-to with a targeted 6 month hold for flip or 18 month refinance? Unless the seller has to be immediately out of the mortgage I see sub-to as an excellent cost reduction strategy.

just reading between the lines.. but if the bank says they will take 91k for it sounds like the mortgage is in default so a sub to might not be possible.

[Timothy Franklin]

Okay @Jay Hinrichs that makes sense to me, I didn't interpret it like that. When I read the bank would accept 91k I understood that to mean that was the 30 day payoff amount on the mortgage.