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Well we inked the contract a few hours ago, so now I'll talk about it. This will be my first deal, and my uncle is partnering with me on it. Keeping the training wheels on so to speak.
I'll call it property A:
The house:
Pre war colonial, 1.5 baths, 3 bedrooms, 1267sf. Its in pretty decent shape, we are going to clean it up a bit, maybe throw a new counter on in the kitchen and sell it. It has a fuse box so that will be getting replaced with breakers to keep FHA happy. It also has a 50 year old furnace that works fine, but its old. We are debating if we should put in a gas furnace, or just leave it and let the buyers negotiate for one. It would cost about $3k for a gas furnace. Another option since the house has a good(full) oil tank already is to just put another oil furnace in for about $2,500. Not sure what we want to do yet. I kind of want to install the gas furnace and run the 200 gallons of heating oil in my car, that’s 8 free tanks. Any input on the furnace? We plan on dropping a G note on some new garage doors as well. It has a detached garage that's pretty decent but not the best.
The house itself is in good shape with a 3-4 year old custom roof, newer siding, some newer windows, about a 10 year old kitchen. They dropped $12k on a small kitchen so the cabinets are nice.
The lot:
This is where we are making the money, were just trying not to lose money on the house.
It’s a 50x100 level, flat corner lot; on a quite street. No site work needed perfectly level and flat, has gas right out front. All I have to do is cut down a few small trees. I have the blue prints sitting on my desk as I type this; I'm going to use one of my uncles cookie cutter raised ranch's to save money. He builds a bunch of these and their pretty nice. About 2,300sf, three beds, three full baths, two car garage, etc. Very nice house, they sell well.
Now to what counts:
We are paying them $325k, cash.
$225k for the house, $100k for the lot. So quite a bit, he prefers to pay about $50k for the lots.
The house we are going to list for $249,900. Were just hoping to break even on the house, we just want to dispose of it.
$249,000
-5%
$237,405
-$1k for closing costs
$236,405
+ $800 for a full tank of oil that we didn't pay for.
$237,205
-$225,000
$12,205 of room.
Out of that $12,205 comes the fuse panel which will run about $400 to replace, $1k for the garage doors, and let’s say $2,500 for an oil furnace.
So that means we have $8,305 of room, that’s freaking tight, bet we lose a bit on that thing.:fryingpan:
Now for the lot:
$100k
I'm going to say $125k for the house now, but I know it’s going to be less. That number includes everything, survey etc. My uncle is going to get me an exact number, my gut says about $110k, but well see.
I'm going to list it for $349,900 which should be about right. He just sold the same house for $325k on a crappy street; this one is in a much nicer neighborhood.
So $349,900
-4%
$335,904
-$1k for closing
$334,904
-$100k for the lot
$234,904
-$125k for the house
$109,904
So after the people beat us down and we lose a bit getting rid of the old house, we can probably walk away with $100k split two ways.
Baring any problems this should be built by Christmas, and hopefully sold. I want to do at least two next year so I need to get this deal done with, to free up some cash. When the market turns around I want to be ready to build like crazy, so I can start building condo's to rent.
I'll post updates and better numbers as the deal matures.
The governments going to take quite a chunk, but I’m doing some other things. I should hit next spring with $40k-$50k to invest which would be perfect. Not bad for 6 months worth of work, and not investing a penny of my own money.
I'll call it property A:
The house:
Pre war colonial, 1.5 baths, 3 bedrooms, 1267sf. Its in pretty decent shape, we are going to clean it up a bit, maybe throw a new counter on in the kitchen and sell it. It has a fuse box so that will be getting replaced with breakers to keep FHA happy. It also has a 50 year old furnace that works fine, but its old. We are debating if we should put in a gas furnace, or just leave it and let the buyers negotiate for one. It would cost about $3k for a gas furnace. Another option since the house has a good(full) oil tank already is to just put another oil furnace in for about $2,500. Not sure what we want to do yet. I kind of want to install the gas furnace and run the 200 gallons of heating oil in my car, that’s 8 free tanks. Any input on the furnace? We plan on dropping a G note on some new garage doors as well. It has a detached garage that's pretty decent but not the best.
The house itself is in good shape with a 3-4 year old custom roof, newer siding, some newer windows, about a 10 year old kitchen. They dropped $12k on a small kitchen so the cabinets are nice.
The lot:
This is where we are making the money, were just trying not to lose money on the house.
It’s a 50x100 level, flat corner lot; on a quite street. No site work needed perfectly level and flat, has gas right out front. All I have to do is cut down a few small trees. I have the blue prints sitting on my desk as I type this; I'm going to use one of my uncles cookie cutter raised ranch's to save money. He builds a bunch of these and their pretty nice. About 2,300sf, three beds, three full baths, two car garage, etc. Very nice house, they sell well.
Now to what counts:
We are paying them $325k, cash.
$225k for the house, $100k for the lot. So quite a bit, he prefers to pay about $50k for the lots.
The house we are going to list for $249,900. Were just hoping to break even on the house, we just want to dispose of it.
$249,000
-5%
$237,405
-$1k for closing costs
$236,405
+ $800 for a full tank of oil that we didn't pay for.
$237,205
-$225,000
$12,205 of room.
Out of that $12,205 comes the fuse panel which will run about $400 to replace, $1k for the garage doors, and let’s say $2,500 for an oil furnace.
So that means we have $8,305 of room, that’s freaking tight, bet we lose a bit on that thing.:fryingpan:
Now for the lot:
$100k
I'm going to say $125k for the house now, but I know it’s going to be less. That number includes everything, survey etc. My uncle is going to get me an exact number, my gut says about $110k, but well see.
I'm going to list it for $349,900 which should be about right. He just sold the same house for $325k on a crappy street; this one is in a much nicer neighborhood.
So $349,900
-4%
$335,904
-$1k for closing
$334,904
-$100k for the lot
$234,904
-$125k for the house
$109,904
So after the people beat us down and we lose a bit getting rid of the old house, we can probably walk away with $100k split two ways.
Baring any problems this should be built by Christmas, and hopefully sold. I want to do at least two next year so I need to get this deal done with, to free up some cash. When the market turns around I want to be ready to build like crazy, so I can start building condo's to rent.
I'll post updates and better numbers as the deal matures.
The governments going to take quite a chunk, but I’m doing some other things. I should hit next spring with $40k-$50k to invest which would be perfect. Not bad for 6 months worth of work, and not investing a penny of my own money.
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