Skip to content
×
Try PRO Free Today!
BiggerPockets Pro offers you a comprehensive suite of tools and resources
Market and Deal Finder Tools
Deal Analysis Calculators
Property Management Software
Exclusive discounts to Home Depot, RentRedi, and more
$0
7 days free
$828/yr or $69/mo when billed monthly.
$390/yr or $32.5/mo when billed annually.
7 days free. Cancel anytime.
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
Rehabbing & House Flipping
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated over 5 years ago on . Most recent reply

User Stats

47
Posts
20
Votes
Teren Cooley
  • Richmond, VA
20
Votes |
47
Posts

Selling a rehab project...quickly

Teren Cooley
  • Richmond, VA
Posted

Hi everyone,

So I’m a pretty new investor and I just closed on a property that needs major renovations. Floors, drywall, electric, roof, maybe plumbing, but I’m no expert and can not evaluate these things myself. I do know that there is already a well and septic system and the cinder block foundation still looks to be in great shape. Also, most of the studs along with the stairs still look good. That’s about the extent of my observations.

I bought it because it’s on a nice piece of land near some waterfront and I got it for a ridiculously low price and it just struck me as a no brainer. I’m concerned about cash flow right now and wanna sell this thing ASAP so I can move on to some other deals I’ve got.

How would you guys suggest moving forward? I don’t wanna invest any more at this point unless some inspections are completely necessary. I know the profit margin is there basically no matter what, but obviously I wanna get as much as I can for it. I’m thinking 75-85% I’d assessed. I’m already working on getting it up on the major channels (Zillow, fb, fl) but wanna be more proactive and line up a buyer soon. Thinking about calling builders and contractors but not really sure where to start there. Thanks in advance for your input!

Most Popular Reply

User Stats

17,995
Posts
17,196
Votes
J Scott
  • Investor
  • Sarasota, FL
17,196
Votes |
17,995
Posts
J Scott
  • Investor
  • Sarasota, FL
ModeratorReplied

Sounds like you bought it without a plan...  Not the best strategy...

First step (at this point) is to figure out what the highest and best use of the property is.  Rehab?  Rental?  Tear-down?

Next step is to figure out what it's worth.  You said 75-85%...but 75-85% of what?  And how did you come up with that number?  Valuating a rehab is going to be different than valuating a rental which is going to be different than evaluating a development deal.  Go back to the highest and best use and figure out a value based on that.

Once you have a highest and best use, you know who your end-buyer will be (in general).  Whether it will be a flipper, landlord, developer, etc.  And once you know the value of the property, you know what you can sell it for.  Start reaching out to those end-buyers through whatever channel is best to reach them and let them know you're selling the property for $X.

Next time, figure out these things BEFORE you purchase...  You may find that the property isn't as good a deal as you thought.

Loading replies...