Great. I’ve basically been in freak-out mode since Monday morning. There was an online auction for properties. I told Dad there was a property I was interested in but that it was going to be too expensive for us. I watched anyway. And guess what…I bid. And guess what…I got the property. For $72000 plus the buyer’s fee of $3600. I really didn’t think no one would out-bid me. I really didn’t. I only clicked the stupid button once.
Here’s a pic of the house:
So now I was stuck. I would have to cough up the down payment of $3700 and walk away, or try to figure out a way to buy the damn thing. Since I only have 40k in cash right now for property I would have to borrow the rest. The house is a good deal, not a screaming deal but a good one. Here’s the numbers:
Comps in immediate neighborhood
Last sale 126k (with basement mine is on a slab with slightly larger square footage)
Current pending contract in subdivision 115k under contract in one day
Mine needs about 10k in paint, carpet and appliances to look great. So:
- Purchase Price $75,600.00
- Fix up cost $10,000.00
- Sales price $115,000.00
- Closing costs/broker fees $7000
- Total upside potential $22,000
The problem was I didn’t discuss this with Dad before I did it. I felt horrible. I’ll admit it I peed in my pants a little when the auctioneer said my number won. Dad was upset, but said he trusts me. This is my business. I know I can do it and make a profit, I just shouldn’t have done it this way. I’ve learned my lesson and will never, never do anything like this again.
Also, flipping was never in my plan. I just want to buy properties under 50k and rent them long term.
In the end a real estate agent friend of mine agreed to go in on it with me 50/50. We’ll both put in half the cash and split the profit when it sells. Personally I can’t wait for the day.