Deal to be evaluated

[Rhoan Scarlett]

Hello All, My name is Rhoan and I am new to BP and need feedback on evaluating this deal I found in my area. A brick colonial estate in desirable town with excellent school system (selling for $266,000). The estate currently has a reverse mortgage of 266,000 to pay taxes and bills since the original owners died. The current seller (son) said he'll sell it to me for whatever FHA appraises it for. Last appraisal was for 225k, from a deal that fell apart. If I can get FHA appraisal below 235,000 I can have it but cash only. Please let me know what you think about this deal below. Thanks. Here is the detail below. Looks like a profitable deal but is it really from an experienced professional viewpoint? Here's my worksheet Cash purchase $225,000 ( FHA est. appraisal) Est repairs. $100,000 Fees(points,insp)$5,000 Insurance $. $1500 Carry cost $10,000 (6 mnths) Realtor fees $5,000 TOTAL COST. $346,000 ARV( comp). $500,000 Profit potential. $154,000 ( 50/50) split. Town appraisal at $522,200 Town Assessed at $366,000 Bldg sq ft 9762

[Bill Jacobsen]

As Joel mentioned, the estimate for real estate commissions are too low. They will probably be $25,000 to $30,000. I assume that holding costs include property taxes.

Based on you ARV and rehab cost my estimate of profit would be $90,000 to $100,000. Based on my requirement of 20% I could buy up to $243,000.

Congratulations on finding a good deal.

Bill