And just to kind of let you know, I think there’s been some drug issues or issues there too. So you might have to do like meth or drug remediation,
remediation, and I gotta add a little more in my budget,
you know, pretty much what I’m doing is I’m getting your information, I’m gonna have to go back to the seller because you know, what’s happened is the seller has been at, you know, wanting to 52 Just getting beat up, get beat up, and now she’s down lower and lower, and I just, I just need a firm offer to bring to her and be like, hey, you know, this is reality, this is what’s going to happen if you need to sell if you want to sell this is what we’re gonna have
Alright, guys, this is a guy that I met, when I was in Vegas shooting fun funding face off, and he buys we’re have some deals, so we’re gonna ask him about the deal that I sent him. And I’m gonna help you, Jared. Nathan, how are you doing? Hey, good. How are you doing? Are you good? Are you busy right now?
No, no, I’m gonna I guess that appointment was we just moved my other appointment.
Well, I appreciate that. You’re doing that for me. So yeah, let’s kind of dive into this deal. You said that you? Did you go and walk it? Or did your agent just go and see it or what ended up happening?
Yeah, so my agent went and looked at the property for me and pull up some comps. And then I went ahead and just did what’s called the remote budget, because the numbers are just kind of scrutinize them. And I was gonna try to head down and take a look at the property. So I could get dial in on whether or not the repair budget I put together remotely is spot on or not couple things, the photos were really good at telling me kind of what was going on with the property. So you can see it means all the windows printed inside if I needed to break the box and furnace. And so now those photos being there in the condition, that’s one thing I’m checking on. The other was the name service disconnect on this particular property. It looks to me like the wires are cut, and I know it’s got a solar system on it. Right. So if that lines cut, I gotta run in a new meter base. And if I bring in I gotta pull license to get that done, because I gotta run the new line from the new meter base, how to the telephone pole, right? So permits are gonna have to be pulled. And that means they’ll probably make me forcibly do the upgraded service panels and then the electrical the question,
Right, I want to write that down and ask the seller, what’s the concern is you’re seeing that some of the lines are cut power lines are cut, it looks
lLike from the photo on the back of the property that was sent over, the wires come down and the roof line and I can’t see where they go. Normally those when he talks in stretched out and brought from that meter base up, and then the meters pull off the back. So to me, that means the city or so many who have come in and pull that nail every two issues up for me as a buyer, one, I gotta call the city and find out if this thing has a certificate of occupancy. And the meter base in bold isn’t normal, unless they’ve pulled, they need to see the certificate of occupancy. So that’s one thing I’m checking out is what do needs to be done. And then of course, that line just laying there because the other issue, so I may have to pull permits, or maybe maybe as a CEO, for whatever reason, there’s an electrical issue where they won’t let them run meter base, the power company has pulled the meter. And assuming, based on that, I made a couple other assumptions. You know, I’ve got to replace all the windows on this particular house, there’s a little bit of a foundation settling problem on the front. So I don’t know to what extent that is thought to just go walked out the chimney looks great on it, we got a whole sheet rock on the whole interior and a skim coat throughout the entire house. And it’s kind of hard to get for. We’ve got that fireplace in the front room that they’ve already walked in and removed, just covered that out. And then we’ve got a couple rooms with some people out that needs to be replaced with compound cells for the right amount. So the bathroom looks pretty decent, I can probably get away with keeping the shower on one bathroom and the toilet based on what I can see looks like there’s some electrical and there could just be sprinkler system stuff run out the front and connected in the laundry room. But it looks like the laundry room is overflowed a couple times.
But it could just be there stuff that also looks like there’s a toilet in there and that there is a toilet. There’s a toilet in the basement in the laundry room.
Yeah, this was above ground actually. Yeah, though, there’s a laundry room looks like it’s a laundry, maybe half bath or something.
Yeah, that’s what it is. It’s a laundry room, half bath, there’s a bunch of holes in the wall.
And that could be just some electrical issues. And where they run some wires in and out can be just cable. But it could also be just sprinkler system. So it might be electrical, which okay, there’s older Windows, just all of them have to be replaced throughout the house, buying last door looks like the homeowner did it and I can see daylight behind that and all that wood paneling in that back room.
So that’s all going to be stripped out and she brought in just to kind of let you know, I think there’s been some drug issues or issues there too. So you might have to do like meth or drug remediation,
remediation and I’m going to add a little more in my budget
you know, pretty much what I’m doing is I’m getting your information I’m gonna have to go back to the seller because you know, what’s happened is the seller has been at you know, wanting to 52 Just getting beat up, get beat up and now she’s down lower and lower and I just I just need a firm offer to bring to her and be like, hey, you know, this is reality. This is what’s going to happen if you need to sell if you want to sell this is what we’re going to have to do for you know, and if I can negotiate it And we’re good but you know she’s just her expectations are too high. So let’s let’s kind of run your numbers real quick got my calculator What did you have the ARV at? What did you feel like it was worth after, you know after you fix it up 340
So I’ve got about 340,000. Now I don’t have math remediation in here. Yeah. 340 Realtors Commission’s on the resale are gonna count to be about 20,000. And that’s closing costs about 85. I’ve got holding costs for about six months covering the mortgage payments, it’s already there in place six months.
Okay, so when you sell a house, don’t you? I mean, I know some agents that are able to for like 1% or like 2500. So you you pay the full 3% You know, for listing agent and a buyer’s agent.
Oh, normally I always pay the realtor the commission if they bring me the deal, right. Okay. In this case, there was no real for their profit deal. But it only changes the Commission’s from six grand. So to go from a 4% realist commission to a 6% commission is
okay, what did you have for the rehab?
So the rehab without Methamphetamine is 76,000. Yeah,
I was right there with you on 76. On that one, you were saying you would make $0? At what price to 27.
But yeah, my offer price on it is 228. And I didn’t make a dime.
Okay. 228. That’s what she said to 28. Alright, so 228, but I don’t make a dime. So let me ask you this about the property, how much you’re usually trying to make per deal, you know, a flip for it makes sense for you to do it.
It actually depends on how much out of pocket expense I’m having to throw out. Okay. So in this case, because if I kind of hold my money here on this project, and I have opportunity costs and other projects, of course, yeah. 22 grands, a little shy on this for the risk, right? market shift, a quarter percent interest rate, I can list the house for 667. And I’ve lowered the price down to 650. And I still haven’t sold. So now $60,000 adjustments because market shifts? Yes, of course, I’d have my money tied up for 1234 or five years? Well, I’m holding it as a rental property after I completely renovated it and my renters destroy it. Yes, that’s the risk. So for me, I mean, I don’t think I do. I mean, even if I went conservatively at like 20,000, right, within a market that’s a little volatile. Right, right, right. So if I did that mission, you’re at 207. And that’s the most I can pay, but I haven’t calculated the missing payments.
Yeah, so their payoff is 181. And that pays off their solar that pays off the lien. Well, it’s the grant on the property. So we can get rid of the solar and assume that and
I like do that solar, because I just need to pay that later. 18k. Okay. That means there really is an $18,000 cost associated with that. Like it has to be paid at some point. Right? So you have to be sooner or later.
And you wouldn’t want this as a rental. Right? You’re looking at this as a flip.
Oh, I don’t want to pay a $76,000. Yeah, flip. And then, and then hold on. I mean, like, there’s other stuff, I can make that money, make more money.
greed. Agreed. I don’t think it’s your rental, it’s way too much money to put into it for rental. I mean, you gotta fix it up, you got to catch it up doesn’t make sense as a rental, and I pay 18 off on the solar, and then I catch up, they’re missing payments as well, like the most I could pay for it would be 177 less than what they owe.
And if I wanted to make nothing I could pay 205. Yeah, yeah, if I literally just wanted to do it for charity, then it’s 205 Solar have a theme, and then the payoff on the nipping payments at 12. And that doesn’t even paint, you
know, yeah, I’ve been trying to wrack my brain on how I can make this deal work because they’re super motivated, right? But then you gotta have the, it’s behind. So it’s distressed. So you’d have to fix it up. So it’s really, pain doesn’t really come out until you go to resell it, right? Yeah, it doesn’t have to come out. Like their goal was to get a cash offer, she wanted to 25 and then you know, the payoff for everything is 181. And she was just hoping to do that, right. But then if you don’t have them finance your flips, then you you gotta get hard money. And then the numbers are
are different. I’m not all I really cover, it is six months worth of their interest payments, if I remember correctly, they’re about 800 800.
So it sounds to me like the the play of doing this, this property as a rental is out, you know, just requires too much down, it’s got to be a cash purchase. But you know, it’s it’s so low, you know, because of having to catch it up and all that it sounds like she’s pretty much just underwater to be real underwater. The deal with this one is like, you know, there’s there’s some major motivation there and to the point where she’s like, look, I might just even let this thing go. Right. So if I can get her anything I met the expectations were like 250. Right. But you know, that was at the beginning. But now that’s not even close to what it isn’t. The longer they wait, the more that the attorney fees and everything you’re going to cost on the pre foreclosure. So you know, I’d love to get her something,
a reinstatement fee 12,000 Or is it more than that?
It’s 12,000 with everything included, so the mortgage is 158 including what is behind which is 12,000 with fees and everything and then there’s the solar plus the $4,000 grant from the city for you if he sells before like three or four years, which he would be because he just bought that House. So that’s why it’s 181 out the door. That’s what that’s what they have to pay out. If you fill it, there’s a grant.
Yes. You didn’t have to come up front that money can come out back on the resale. Right, right. Yeah, exactly. Let me see if I can set up an appointment today or tomorrow.
Yeah, just keep me posted. And then I’ll talk to the seller. I mean, just from what we’ve talked about, it just sounds like it’s with interest rates going up, the mountain that she’s gonna be able to get for this thing is just going lower and lower, you know, so let me let me ask you about your opinion on this situation on this deal. I can do a Novation with her and just say, hey, look like let me let me list this for you. Let’s see what offers we get on the MLS? And you know, I’ll pay you a specific amount and then I’ll take care of the Commission’s and the fees. Do you think if we put this on the MLS, if we don’t get her to the offer that she’s looking for, like, maybe somebody else could come in a little bit higher?
I don’t think so. I mean, years about a rock bottom, if you can get like, literally unless you’ve got a guy that can magically make the rehab less? Magically. That’d be like, a more.
I know, isn’t that crazy?
I mean, because I’m using her interest rate of 2.99. Yeah. And I’m not even using my own cash for 150 of it. I know, right? Yeah, this is rock bottom,
we’re gonna have to get creative on this one. And if there’s something we can do to work together, let’s do it. So give me a call. Let me know when you can get out there. And I’ll try to schedule it. And I’ll call the seller and just kind of break the news on what’s going on with the property.
Okay. Yeah. So it’s, I mean, it’s just the numbers are super tight with where I think the market is headed, and where the cops are at, because you know, 340 I honestly thought it was 330 my agent keeps pushing me the capital and I can sell it at like 340 goes.
Yeah, I mean, you know, this thing was worth maybe 363 80 before the shift the shift, so let me know when you can make it up there. And then we’ll set it up because, you know, my due diligence period, or my contract ends with them at the end of the week, so we can make some happen. We’ll extend but if not, I’ll just let her know like, hey, let’s you you understand that you’re not getting what you want. You know, I can’t really help you out anymore. Thanks, Jerry. We’ll be in touch. Alright, sounds good. Oh, man, that house went from being a deal to another deal with all the crap. Oh my god, that is crazy.
