It took almost 6 months to close on this house. I finally closed on December 29th but the house is now on hold while my crew finishes up on the Bathroom Hole House. We should start work in early February.
I have taken pictures of the house and completed the repair list. Here is a breakdown of the repair list:
|Replace Stolen AC Units
|Paint – Interior and Outside Trim
I am calling this the eon house, because it seems to be taking that long to close.
This is first house I will be buying since starting my new strategies. I had originally made the offer with the intention of this being a rental. However, I have now decided to attempt a flip for the first time.
The eon house is a 2,171 sq/ft houses in a decent neighborhood. This is a split level house that has 4 bedrooms and two bathrooms. It was a bank owned property and the tax assessed value is $102,000. The tax records show that it has a pool but that has been filled in. This house should rent for $950, and I have another smaller house down the street that rents for $900. I would not want to spend more than $55,000 on this house as a rental (about my goal of 60 times rent).
I now intend to flip the house so my buying strategy is a little different. I estimate that the ARV (After Repair Value) is $80,000. Since the bank is already involved I have an appraisal that gives this amount. I think this number is conservative and I may be able to sell it for more than this. My goal is to purchase at 70% of value, minus the repairs and closing costs. This means I would not want to spend more than $56,000 total.
I estimate the repairs to be $21,000 and it will cost about $2,500 to close. I have a contract to purchase for $33,250 which means I will spend about $56,740 – just a bit over my target for a flip.
I have a loan approved at a local credit union. They will loan 75% of what I spend on the house. This is a 10 year balloon at 7.5% with a 15 year amortization. However, it is initially an interest only construction loan while I renovate (and I can usually wait a few months to roll it to perm). Assuming it take 6 months from purchase to sale I will pay about $2,000 and another $1,800 in utilities. I am budgeting $4,000 for carrying costs.