All Forum Posts by: Daniel Levine

My State, however I just need a staring point, something I can give to my lawyer so he can review it and make changes.

I agree with some of the other responders that your margins are quite tight. Personally, it doesn't look like a good enough deal to me. But, if you are still interested and are asking advice concerning the bank asking you for your best and highest , don't worry too much about that. Sometimes banks will get into a bidding war with you. In other words, they will act like someone else is giving a better offer than you in order to find out if they can get more money from you. So, if you have already done the math and know that the numbers are what you can live with, don't be pressured into offering anything more than you already have. Just come back to the bank with, "this IS my best and highest."  if indeed someone else has bid higher than you, then let them have the loss.  

One thing that I learned while investing in the stock market which I can justify attributing also to Realestate is the saying, "don't chase the bus. People who chase the bus get run over."  In other words, after you have done your homework and know what numbers make sense, never get suckered into emotionally running up with the numbers simply in order to get the deal. You will only lothase money.

Thank you Daniel, that seems like sage advice and I had the same thought that maybe I am bidding against myself. I appreciate your feedback.

@Daniel Levine

150k * .7 = 105k

$56,250 + 60,000 + 11,500 + $15,000 = get out of this deal 

or $142,750 and you aren't too firm on that number.

If you believe the number above to be accurate, run away and do so quickly.  This is not a deal worth looking at.

Flips need a much stronger evaluation than "back of a napkin."  I'm guessing you aren't a contractor given the generality of your rehab number.  Pick up J. Scott's book on rehabbing, it will lay the ground work for your flipping rehab knowledge.  $60k could do 4 full 1 bed apartments in crappy everything or 1 high end kitchen in a Boston suburb.

Where did you get your closing costs number?  Beyond the 6% you'll pay a realtor, what encompasses the remaining 4%?  Are seller paid closing costs the norm in your area?

Did you run comps?  150-175k is a broad number.  You should be able to narrow this down to a 10k range at most.

You want to go from "I'm a bit nervous" to "Hey BP, I've got this place in Conifer, CO that should cost me $121k all in (see numbers below) and comps are running at $165k.  But my place has an extra deck on the back.  Do you think I could get another $4k in an slowly/moderately/quickly rising market?"

Daniel,

Profit margins seem very tight to me. Try using one of the calculators on this site to verify the math. Good luck...

Mark