All Forum Posts by: Troy Jaster

Sent you a PM 

I suppose I owe everyone an update...

I officially bought the house yesterday. The rehab budget is more than I first projected (surprise, surprise!) and yet it still made sense. Here are the details:

Purchase price was $200k. I put $5k down and the seller is holding the balance of $195k for 3 months, no payments, no interest, no charges. Current rehab estimate is $25k. I estimate it'll sell between $260-270k which means I'll clear about $20k.  

The timeline is tight but since I have a really good, long term relationship with the seller, she allowed me to get in and start the rehab 2 weeks ago. Therefore, I'm already about 50% done with the rehab. My goal is to have it on the market around Jan. 20th. Though it will be an anxious wait, I'm confident it'll close before my mid-March deadline.

I went back and forth a lot on whether to flip or to hold. Ultimately, my wife and I are wanting to build a real estate portfolio and we decided that we could better use the short term cash to continue to increase our real estate fund so that in the future, we can purchase with our own cash and then refinance out, post rehab.

One huge A-HA for me has been that I fully expected to do a lot of the work myself on this one. However, getting contractors at a great price during the holidays was actually relatively easy because many crews don't have work during these breaks. So even though I expected to be putting lots of 'sweat equity' into this one, I instead just became my own GC. I've done a few 'grunt' projects which has been fine. I'm excited to get this one finished up and on the market soon. 

I'll keep you all updated!

@Jon Kelly The seller was renting it to her daughter and she just wants to liquidate some of her properties and is considering moving out of state.

No matter what, I’d get an inspection.

@Walter Key Haven’t run all the rental figures yet. Just visited it again last night and started with the flip numbers first.

@Troy Jaster I meant to add in, if I pass on it, she’ll do the rehab herself and list at full price with me.

@Walter Key I'm basing the "not a perfect deal" comment off of the fact that it's doesn't hit some of those traditional metrics: ie. 70% of ARV or the 1% rental rule.

@Andy Eakes

The reason she’s offering it to me first is because of the relationship we’ve built over the past few years. She isn’t pitching it out to the world at my price. If don’t take it, she’ll probably do the $5-15k of work herself and then I’ll list it at full retail.

I’m a Realtor and a client of mine is offering her house to me prior to listing it on the market, if I pass.

It's on the borderline where it's not a sure thing but it feels like enough of a discount that I don't want to pass it up. I know it’s not a perfect deal and yet I feel like it could be a decent one. Rough numbers are...

Purchase price $200-205k.

Rehab is almost all cosmetic. Could be as low as $5k if I DIY a lot, high side is probably $13-15k if I contract everything.

ARV is $250-260k.

If I do it, I'm leaning towards quick flip. Comp rental rates are $1,800-2,000/month.

Thoughts?

@Scott White - Ah, I missed that in your original post. That's crazy. I know I've changed data points on a couple of my houses and it always stuck. Hope you can figure this one out.

If you are the owner of the property, you can log in to the owner portal side of Zillow and correct facts about the home. You just have to make sure you've 'claimed' the ownership of it within their system and then it'll allow you to make updates.