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Real Estate Offering!

April 8th, 2014 at 05:23 am

Ok we have an offer in on the house I recently blogged about. There is already one offer in and our realtor got the hint that it was higher than asking. So we went in almost 10% above asking. I am expecting that more offers will come in as well. The house is a few streets away from me and every time I go by it has someone looking at it.

The house needs a good overhaul inside. Outside is very pretty.

If we get it- we have a few options for it:

Ideally we want to partner with our contractor. He is coming over tonight to discuss things with us. We will pay for the house and holding costs, he will supply materials & labor. We will split the profits 50/50. Our contractor has sheet rock, sinks, ceiling fans, tile, misc. from other jobs in storage. He also will get the labor cheaper because there is no fee to pay him as a middleman for the labor. He said he can "get it done" for $25k. The question becomes- what is his version of "get it done" and what is ours? Since we have not partnered together I'm not sure how far our visions range from one another. But this is the safest option for us right now because we wont have to max out our savings to complete the job.

A second option is to flip the house ourselves. I don't think we can "get it done" for $25k. I would guess it will be about $50k for us because we are paying labor/ retail prices/ and don't have materials in storage. We don't have the full $50k unless we called in some loans that people owe us. And I'm not sure they can pay. So the job might not get done as nicely as we would like/ or we would stretch ourselves more than we feel comfortable.

And a third option is to put in minimal upgrades and rent the house. This is not a bad option at all considering that the market is climbing and the neighborhood is transitioning in a good direction. We could recover our purchase price and fix up investment within a few years because the house is so under priced compared to rent in the area. However- I don't really want to tie up the last of our savings and be responsible for another property right now. I feel like every property needs a substantial "cushion" of savings to be available for repairs- especially a new and unknown house- and we wont have that cushion after we spend money to make the place renter -grade. So for 6-7 months while we build that cushion, things would be tight and stressful. I'd rather just get in and get out at this time.

Ok, so I'll post numbers if we actually get the place. I feel like I am jinxing things to plan too much beforehand.

We should know something in a few days!

5 Responses to “Real Estate Offering!”

  1. Rachael777 Says:

    congrats and excited to hear more.

  2. wife of the deacon Says:

    Good luck! Look forward to seeing how this plays out if it goes through! Smile

  3. creditcardfree Says:

    Best wishes! I like option 3 best, but I do see your point about cash cushion and how that might not be idea.

  4. Kiki Says:

    couple of questions:

    signed contract with the contractor with all expectations listed?

    and now I can't remember the second question!

  5. TashaC. Says:

    Working on it Kiki!

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