All Forum Posts by: Lance Gorton

I did not expect the honor of you Brian - thanks. The term "brokering contracts" has

surfaced on here and I know the landscape for LO is evolving. It just seems to me to be the same idea - enter a contract with a clause that it can be assigned then assign it. Unless the DRE sees a different "intention". I know, get an Attny. And isn't assigning that Lease and Option close to selling what I don't own? That worries me.

How is assigning or selling my contract on a Lease Option different than doing the same thing on a "flip"?

Much thanks and respect to you all.

I know there are drawbacks - just wondering what they might cost in value or time to sell. Here are the numbers just for fun...

ARV - 236,000 (160/sf)

Buy - 170,000

Rehab - 25,000

selling fees - 17,000

8 months holding - 7200

Cost of $ - 16,000

     That is about break even - would be fine if I knew I could get it just to make my investor money and open some doors. Avg DOM is 88 on all comps. Funny - only 2 comps on that busy street and they avg. 163/sf AND 68 Days On Market! Not enough comps on that street to draw a stronger conclusion.

I have a wholesale deal offered to me. It is on a busy street - 4 lane with about 30 cars / minute passing. Comps are 155 / sf. I am estimating 5% less on my ARV due to busy street. The deal does not leave me much profit if any - here is the catch. I have a great private lender and would like to get him paid and build the relationship. The rehab is simple and I am confident in my numbers. Should I risk not making a dime or even losing several thousand just to get this under our belt? I'm looking at this philosophically at this point.

Thanks Chad and Steven! Your input has given clarity and sharpened how I will look at a deal. The market is good in that area and lots of comps.  #s are on a sure deal with "best case" being much better. I have adjusted my max bid down already. Lots to think about - thanks again.

I guess the silence says it all. This is not a good deal for me as it sits unless I have 1) under-estimated ARV or 2) over-estimated the rehab. Any advice would be much appreciated.

Lance

Here are the numbers on a potential Trustee's Sale deal. Is there enough profit here and have I overlooked something big? Thanks for any feedback.

ARV: $375,000  (Broker says more but this is a solid, well comped number. He said more

               like 425,000 but that was based on avg per sf sales, incl smaller homes.)

Max bid: $281,101 (the most I would bid. Opening bid 275,000)

Rehab: $30,000  (I know - w/o interior inspection it is a guess. The home is very nice

               outside, great neighborhood and looks good through the windows). Home 12

               years old. HOAs (70/mo). Was one of the model homes...

Selling cost: 5% Broker and 3% fees = $30,000

Holding / Arrears: $11,000 (I have verified HOA, cnty Taxes. Includes insur., utilities)

Funding: 10% or equity partner 50/50. My $ investor is open... Let's say 10%, no pts.,

               and 8 month turn around, 322,101 loan. That is $22,613 to investor @ COE.

NET TO ME: $286 (from 93,900!!!)

Variables: Home occupied (thus 8 mos to evict etc.)

                General is in-law. He will cut his fees to help (5,000). Yes, he's good.

FSBO - saves 2% if co-op to Realtor, saves 7,500

                $ investor - our 1st "deal" - don't want him turned off!!!

Be kind, Lance