AboutHeather Expertise I can offer information about pre-foreclosures, foreclosures, short sales and high rise projects in the Las Vegas area. I can also assist with financing questions, especially involving investors.
Experience I have been in the real estate industry since 1990, and 4 years in Las Vegas. I am also a licensed loan agent in Nevada.
Education/Credentials BA in Liberal Studies from CSU Northridge
Licensed Realtor
Question My name is Chris and I recently posted on here a few weeks ago looking for some help with some properties. After looking at the homes and finding the one that fits my goal, I have come across some more questions:
Here is the current Information: 3 bed; 2 bath; Duplex asking 23K; appraised at 43K; 1400sq. ft. Roof is 7 years old (still looks new); Duplex currently is rented-Upstairs (single bath & single room @ 375/month utilities payed by tenant who is occasionally late during the winter due to seasonal work but always catches up, who has been there 10 years. Downstairs-family that has been there 1.5 years, pays 400/month & never been late. Current lease is month to month. House has been on market for 6 months. Not under foreclosure. Ugly looking home in newer neighborhood (only 2 homes on block are in need of repair and one is in the process). Needs all new siding, flooring (carpet, vynal...etc) walls need paint and patching. Basement is dry and strong in terms of support beams & such. Furnace is from the 50's/60's) There is asbestos on the heat pipes and im not sure if I should get an inspection before or after I buy it, or use the inspection contigent on the offer. I have comps of last 6 months sales in Antigo, WI. Taxes are 1.1K. I have no income or assets (besides my car which isnt payed off) I am a college student, and would manage the property myself.
My goal here is to bring monthly cash flow into my pocket and to let the equity build up in the home. I need help drawing up a deal so that I do not low ball the offer. I listed things that the house needs above. I would like to offer seller financing; if that falls through my grandma would co-sign. Any ideas? Thanks for your time and help!
Chris Jesse
Answer Hi Chris - Sorry for the delay in answering.
My advice is first, by all means, get a professional inspection so you know what the repairs will cost you and discover everything that is wrong. Asbestos is very expensive to deal with and so you need to know what's involved before you go in.
Next important thing is have your financing in place. Asking the seller to carry the note is fine, but the seller will want to know you have the ability to pay the loan. Also, how are you going to pay for the repairs? Obviously the current rent isn't going to be enough to pay the mortgage and for all the repairs. If the property is a good price and that takes all your money but the furnace blows the day after you close escrow, how are you going to pay to repair or replace it?
Before you let grandma cosign, she needs to understand exactly what she's getting into. Check with 3 local realtors on the value of the property in its current condition as well as in APV (after repaired value). In this market, only comps from the last 3 months count. Make sure you're buying the property at least 80% of the current market value minus the repairs. Appraisals are great for getting financing, but it doesn't represent what a property will actually sell for. In Las Vegas, I have a property listed that appraised for $285K but the market shows it won't sell for more than $260,000 -- big difference to the seller. So if the property appraises and comps for $43,000 but needs $25,000 worth of work, you don't want to pay more than $43,000 - $25,000 or $18,000. If the property comps for $25,000 but needs $25,000 in repairs, you may want to reconsider getting involved with it at all unless the seller is willing to let you just take it over so he can get out from under.
So you need some professional advice prior to making an offer. Get a true market value (not appraised value) and a true estimate of condition from a certified home inspector and lastly get a few contractors in there to bid on repairs (furnace, roof, siding, flooring, plumbing, electrical -- all the things that could cost you big bucks). You can always make an offer contingent on outcome of inspections and give yourself enough time during the contract to get all the inspections you need (2 weeks or 30 days), noting the repairs should not exceed more than a certain amount, that way if they do you can back out.
You may have found a gem in the rough, but do your homework to make sure. Good luck on whatever you decide.
