Today is Day 37 in our drive for $60,000 in 60 days through real estate investing. We have a number of deals working, and we wanted to update you on the status of each one of them. Some have gone very well, and others have not worked out as well. The good news is that we are continuing to learn every day.
2846 Cherry Rd, Highland, MI
This property is a 1050sq ft home that sits on 1.75 acres and is a definite rehab because the house is currently gutted. The nice thing about this property is that it has a lot of extra rehab materials included with the sale.
We have had this property under contract since July 9th, and our initial exit strategy for the property was to wholesale it as is, or rehab it ourselves. We put the property under contract for a very fair price to the seller, which made it very easy for them to say yes to our offer.
Since then we have employed our full sell that home fast marketing strategy and we have had a lot of interest in the property. We have received well over 20 calls on the property and have had about 8-10 people out to look at it.
From our buyer list, we have had 3 people who I would categorize as serious rehabbers out to look at the property, and the consensus is that the repairs are probably too much for the property to be profitable. We have confirmed this with our own contractor estimates.
Because of this, we have changed our plans on this property a little bit. We have spoken with the seller on a couple of occasions and discussed the feedback we are getting from the buyers. I think at this point, it is really going to take the right buyer to see the value in the property and it is going to have to be someone who is looking to do the repairs themselves and live in the house afterwards. We have a couple of people who fit this profile coming to look at the property in the next couple days, so we will see…
2080 Commonwealth, Auburn Hills, MI
This property is a duplex and is currently rented. Both units were completely rehabbed earlier this year, and at the price offered we’re estimating the property will cashflow at $371 per month. This is a great deal for any investor!
We put this property under contract on July 16, 2010, and we have used the same marketing strategy to market this property. To our surprise there hasn’t been near the amount of interest in this property as there has been on Cherry. We think the price point may be the main factor affecting this.
At this point we are going to try a few more things with this property. We are going to put up some more bandit signs for the property, send out more emails to our ever-expanding buyer list and put out some more online classified ads.
We will see what happens…
630 Lydia, Pontiac, MI
This property is a condo that is currently rented. The intriguing thing with this property is that the lease is structured giving the tenant the option to purchase the property within 5 years. They receive $100 per month towards a down payment, but they also pay the taxes, association fee, insurance and maintenance. This has a huge impact on the cashflow, and our analysis shows the property will cashflow almost $400 per month!
We have had this property under contract since July 31, and we plan to purchase and keep this property because the numbers are just too good. We will list it for sale, but we are going to be pretty stingy on the price because the cashflow is just too good to pass on!
Right now, we are just running through our due diligence on this property, but everything (including the financing) is looking good. So, hopefully we will have this one closed in the next two weeks…we’ll keep you posted.
Royal Oak Bungalow
We are still in negotiation on this property, but things seem to be stalling out. This property is a 4 bed / 2 bath bungalow and has a finished basement. It’s in a great area of Royal Oak, and we’re estimating it needs about $18k in repairs to make it a really nice home.
We submitted our initial offer on the property giving the seller two different purchase scenarios. One was simply a cash offer, and the other was a scenario where we would delay closing for 6 months and we would have the opportunity to go into the property, make the repairs and find a buyer…then close.
I just spoke to the seller yesterday about the offer, and he told me the offer is really too low for him, and he thinks that with minimal repairs (paint) he can get a much higher price.
At this point, we’re going to look a little closer at the comps we pulled by driving by them to get a better analysis of our after repair value. We have also discussed offering him a piece of the deal on the back side if we are able to sell the property for more than what our analysis showed. So this deal is not dead yet, but it’s definitely not looking that great…
Bloomfield Hills Ranch
This property seems to be fizzing out because we are simply too far away on price (about $150k) with the seller. This property is really intriguing because it is in a great area. There are literally homes on the same street that are valued at $1.5 million. The trouble is, this home is a 1300sq ft 3 bed/2 bath home with no basement. Everything else in the neighborhood is 2500sq ft plus and are quite frankly nicer homes.
For our analysis, we are showing that the property needs about $15k in repairs, but we really don’t think the home will sell for more than $158,000. The trouble is that the seller wants $200k and they’re being pretty firm on that price.
At this point, we have to let this one go because we are just too far away on price…maybe they’ll come around 6 months from now after they figure out that they’re priced too high…
So this is where we are at after 37 days. We’ve had a lot of activity and we’ve learned a tremendous amount just by attempting to execute these deals. We need to hustle if we’re going to make it to our goal of $60,000 in 60 days, but we’re trying…Stay Tuned!