Is there really more to this?

Question

Hi, I’ve ready many posts and read the stories of success. Currently seeking feedback to determine if I am on the right path and/or the other things I must truly consider. Please see below:

1. D4D/Deal Machine lead. Early 1900s home (4/1) (1,636 sq ft.). Severe roof damage that now let’s all elements inside the home. Truly a full rehab. Unsure on ARV but when looking at properties sold in the area high is $180K a neighborhood away, but low is $2400 (yes, hundred) in the same neighborhood. County taxes are up to date (last paid amount approx. $500)

2. Seller: States that $10K remains on mortgage ($400 mo. payment) and is only asking for that to walk away. I would need to confirm the actual balance. The property is in pre-foreclosure.

This my first real attempt at helping someone so my thoughts on acquiring property are to find/create the wholesale contract, get the property under contract once I confirm the mortgage balance. It seems straight forward but I believe I am overlooking something. Any thoughts?

Thanks in advance.

Brian Pulaski · Answer

You will need a real ARV. It’s possible with a $180k max of some other house, this one may only be worth low $100k’s. If it truly has the elements getting in and needs a complete gut rehab, the cost to renovate will exceed the ARV. That’s the biggest issue with low priced property.

Joe Villeneuve · Answer

That, and if this is your first deal I wouldn't even consider it.  You're walking into a time bomb, without experience, which means you're only going to see the landmines (ut not all)...not realizing if there (probably) is an atomic bomb just around the corner.

Also, as much as I admire you for wanting to help someone, starting out trying to do that, sill lead to more trouble than it's worth.  You have to put your financial situation first, and then the "helping" after that.  Thin of it as the same thing as why on a plane you are told in case of a crash, to put on "your" oxygen mask first,...before you put on your children's.