Buying first property during COVID

[Daniel Oluwaniyi]

Hi BP!

So I've decided to make the jump and buy my first real estate property. Since its my first property, I naturally have blindspots and I'd thought I'll reach out to the community for help. Found this property through a real estate agent who reached out to me before listing the property. It's in Carrollton and the asking is 200k. Was aiming to pay 195, so I'm pretty close. Here are some details. 

3/2.5 property with a 2 car garage. About 1500 sqft. ARV approx 255k, Rental Income avg: 1600/month

Seller has fixed the following:

• A/C & Heating system fully replaced/upgraded end of March 2020
• Roof - Replaced end of June 2019
• Foundation - Repaired late October/early November 2019
• Plumbing repairs and sewage pipe replacement under slab done during foundation work in 2019
• Kitchen appliances (except the fridge) all upgraded in 2019
• Water Heater and downstairs floors replaced in 2015

I can also get the warranty transferred for the recently repaired items. Seems like mostly cosmetic(Budget for rehab is 30k) and we'll get an inspection done. Here are some terms from the realtor:

• $200K with $2K EMD
• Seller pays title policy
• Buyer pays for Amends if needed
• Seller pays for $500 Home Warranty
• Buyer pay for Survey if they do not have one to provide (because this is really just a requirement of buyers lender)
• Buyer pay $50 for 5 day option
• We DO NOT say AS-IS purchase so if something mediocre comes up in inspection we have some wiggle room to ask for it.
• Seller allows 21 day third party financing time-frame for contingent on loan and we also ask for an appraisal contingency.

Are there questions that I should be asking that I'm not? Or are there things I need to take a look at before going forward?

Thank you

[Dhiraj Chhabra]

First, I will start with the target/end goal. are you thinking of flipping it, renting it, or planning to live?

For flipping, you really need to know the rough rehab costs and whats the property potential sale price. ARV of 255k, PP of 200k, assume rehab cost = 20k, the net profit will be just

(255k * 0.94) - 5k(closing/misc cost) - 220k = $14700

and this too assuming everything goes fine for you. I suggest buying 75% ARV(including rehab cost) for flipping.

For rental, i normally go with 1% or 0.8% rule in areas like Carrollton. these numbers don't adhere to those criteria

for personal use, it looks like a decent buy if yall like the house.