All Forum Posts by: Jeremy Segal

The house was listed as a 2 bed 1 bath with 1150 square feet. The square footage was low, with potential to increase square footage, beds and bath on 2nd floor. The house had way more potential in person than the mls photos showed.

I know the market well here. The house was listed at $190k on the MLS. ARV is $330K-$350k. I took a contractor in for rough estimate on a full gut rehab before making the offer. He gave me a very rough $60-$80K. I added $20k to that to be safe and estimated $100k.

I started at $330k and took off the $100k rehab and $10k carrying costs (interest only LOC and taxes, insurance, etc.) So 70% of $220k was my max allowable offer. That's $154k.

I offered $145k cash, no contingencies, 2 week closing. Seller was an estate sale, and after a couple counter offers came down to $154k and I kept my $3200 commission. So I'm in at $151k.

I think this was a case of right place at right time with a seller that just wanted to unload, and the cash clean deal worked.

To top it off, the property is on 2 quarter acre lots and the second lot is buildable. So we are looking at potential to build a second house as part of the whole package down the road.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $154,000

Single Family, BRRRR. Purchased with line of credit, currently under renovation to rent and refinance.

What made you interested in investing in this type of deal?

I initially looked at this deal as a flip but realized it works as a BRRRR and I would prefer the tax benefits to the tax penalties of a fix and flip.

How did you find this deal and how did you negotiate it?

MLS, cash offer no contingencies.

How did you add value to the deal?

LOC.

What was the outcome?

In process. Closed, under renovation.

I once represented an investor in REO purchase. The bank's title company insisted the contract did not allow for the buyer to use their own title company. After re-reading the contract, it absolutely implied they could. RESPA also prohibits sellers of property that will be purchased with a federally related loan from requiring purchasers to use a particular title company. It may depend on your agreement with the bank, I don't know the specifics of your contract, but I would read it carefully, you may be able to do a bifurcated closing so that you can use your own title company for your side of the transaction. They may push but back down depending on the language in the contract. Parties dislike bifurcation because it can slow things down at the closing.