Post by expatpumpkin on Aug 6, 2012 11:47:33 GMT -5
No. For two reasons:
1 - I think you should be a pro at this, or at the very least an experienced amateur. You're probably overestimating your sale price and underestimating the price of repairs. In reality, you could make very, very little if not nothing on this transaction. You could lose money.
Post by ondaflipside on Aug 6, 2012 12:09:31 GMT -5
No. The numbers, at worse-case scenario:
1. Purchase price at ($250K). 2. Repairs at ($40K) 3. Carrying costs at $2K\month minimum x 6 = ($12K) 4. Escrow costs ($10K) 5. Total costs: ($312K) 6. Sales price of $350K - net is $38K due to you 7. Less 6% commission = ($21K) 8. Less closing costs = ($10K) 9. You'd be lucky to net less than $10K it seems. And that is, if the house is sold asap once the fixes are done.
DH and I have been following this one house in our desired neighborhood. He bought it for a steal ($435K). He's fixing it right now, but it's taking forever. This month makes one year. If he sells it for $550K (the lowest he'd be able to sell it for, and is the current market price even after the fixes), he'd lose $ because of the carrying costs, and repairs. We figured he'd make $ at between $600K-$650K (the average home prices a few years ago), but that's likely not going to happen, considering the better house next door fetched $550K last year.
1 - I think you should be a pro at this, or at the very least an experienced amateur. You're probably overestimating your sale price and underestimating the price of repairs. In reality, you could make very, very little if not nothing on this transaction. You could lose money.
2 - This will probably destroy your friendship.
Sorry
This is kind of what I was going with. It's going to take a lot (probably more than you'd imagine) to get it up to selling potential... Then you might not pull in what you want or even need at that point.
Plus, like so many have said- business + friends =/= not usually good.