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 Heather i read one of your question about a man trying to wholesale a fire damaged property and i am moving to Florida and planning on starting a career in flipping houses. This will be my first investment property and my question is on a 1,283 square foot house what percentage of the house damaged by the fire will put me in over my head? the listing price is $12,350 with neighboring home values priced from $146,000 - $175,000 with the square footage being around the same as the fire damaged property i am looking to repair. I have never flipped a house before but i have worked with family on remodeling and repairing their homes. So i have some experience with repairs. I am mainly worried about when will the fire damage repairs cut profit to next to nothing?
Answer Hi Austin -
Congratulations on joining the real estate investing game, but I don't think you're going to like what I tell you.
Being that you've never flipped a house before, the last house you should start with is one with fire damage. The repairs could be very expensive and you could quickly get in over your head.
Fire does more than damage locally. Heat penetrates a wide area, damaging pipes, electrical, insulation and framing. Unless you were able to get the house at 40% LTV (loan to value), I wouldn't touch it with a ten foot pole. In other words, if the after repaired value was $100,000, I wouldn't pay more than $40,000 for it.
I suggest you look for properties needing just a little updating and some cosmetic work. After you've done a few of those and get an idea what you're up against in the neighborhood you like, then you could venture into properties with more damage. Also, as a new investor in this tough market, you should not invest in properties that are more than 65% LTV minus repairs because you'll have repair costs and carrying costs (mortgage, taxes, insurance until you sell). So again, if the after repaired value was $100,000, and repairs including updates, painting, carpet, appliances, etc. came to $15,000, I would want to take $100,000 times 65% or $65,000 minus $15,000 = $50,000. That's the max I would pay for it.
Remember too, Florida has a lot of moisture problems and a wide variety of pest problems that like moisture.
Good luck on what ever you decide, but I'd stay far away from a property like this and leave it to someone who is well-versed in dealing with properties that have this kind of damage.
Heather Peck
Rosen & Company West
HeatherSellsVegas.com
702-595-7380
LasVegasExpert@yahoo.com
