All Forum Posts by: Ryan O.

Ryan Moseley The offers will be all cash. how do you handle earnest money, do you but down a nominal amount with your offer and increase it upon bank acceptance, or do you wait for acceptance to put any down?

I was wondering how many of you purchase short sales off the MLS to rehab and flip. Up until this point I have been putting offers in on REO's listed on the MLS and I want to increase my ability to purchase properties by possibly buying listed short sales.

My thinking was I would find properties in my farm area figure out my max offer price based on ARV, holding costs and rehab costs and make an offer. I would make as many offers as I could, negotiate with the listing agent, and wait for the bank. The disadvantages to this strategy as I see them are:

Earnest money - can I forgo giving earnest money until bank approval?

Inspection period - I would have to due my inspections at the time of offer correct?

Getting laughed at by listing agents for my "low-ball" offers - but seriously do I even stand a chance of getting my offers accepted by the sellers and submitted to the banks, because the BPO's are too high.

Thoughts?

-Ryan

Thanks Karen,
When you say I should keep my style constant are you referring to the fact I used two different style and color cabinets for the kitchen and bathrooms. Or that that the cabinet style does not match the rest of the house.

Design is not one of my strong points so any feedback is much appreciated.

My original ARV was $285K and I budgeted ~$87K for the repairs. We saved some money in places, but increased the scope a little along the way.

When it was all said and done the repairs came in at ~$85K

Thanks David

To answer your question, no I did not think I would get 330K 5 months ago. I believe a few things contributed to the upside surprise.

1: When I comped out the property before purchasing there were not very many good comps in the area. Properties were either much bigger with higher sales prices or smaller and distressed with lower sales prices. I went conservative and figured a $285K sales price.

2: We made some upgrades in the property that increased the appeal, but did not cost much. The most important one being finishing the basement.

3: The house went on the market at the perfect time, the spring sales season in my area has been very good with many buyers chasing a few attractive properties. This one being one of the nicest, and right at the median sales price for the area.

4: Beginners luck

The equity partner was a family member. It took some convincing to get him interested in the deal, but after seeing the results he can't wait for the next one.

Selling costs broke down as follows:
RE Commisions $16,700
Realtor Admin Fee $345
Title Insurance $1,703
Transfer Taxes $501
Update Survey $250
Attorney $450

The holding costs were:
Property Taxes $1825
Insurance $1453
Utilities ~$800

Ryan

Thanks James and Mike

The scope of the project was more than I had in mind in pursing my first deal. I was originally looking at cosmetic rehabs, but after making many rejected offers I came upon this one and I couldn't be more pleased with the final product.

Ryan

I have used google sketchUp in the past to help visualize how a floor plan or kitchen would look. It works well, but seems to be pretty time consuming to get what you are looking for

Can anybody who has tried both Homestyler and sketchUp comment on how the two compare

Ryan

Brent,

I am also curious how you are getting access to bank owned properties before they are listed. I has been my understanding that once the bank takes possession, they have a pretty strait forward system of getting them back to market. This process starts with giving the listing to a local REO brokerage who eventually markets the property.

Are you saying you have access to asset managers in the banks that will allow you to purchase before the property is marketed.

-Ryan