I need some advice on this buisness deal | TigerDroppings.com

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TIGRLEE
LSU Fan
North Louisiana
Member since Nov 2009
21379 posts

I need some advice on this buisness deal



Scenario is this..
Got a good trusted friend IVe done work and deals with past 10 yrs.
He came across peice of property we he can buy for 50k.
He called me and asked if I wanted to go in half..
25k from me and 25k from him.
Property apprasied for 140k... needs 5-10 in repairs.
Very sell-able and desirable area.
So basically we'll have 60k invested insomething we expect to sell for 140.... thats 80k difference..

Even if we got 100k for it thats still 40k to to the positve.
Im trying to find the negatives on this..
timeline for sale according to realator is 2-3 months..Like I said its a desirbale place.

Any thoughts or suggestions?
TIA







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Janky
LSU Fan
Team Primo
Member since Jun 2011
8051 posts
 Online 

re: I need some advice on this buisness deal


Why are y'all able to get it for $50 if it's worth so much more?





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Broke
LSU Fan
AKA Buttercup
Member since Sep 2006
56474 posts
 Online 

re: I need some advice on this buisness deal


quote:

Why are y'all able to get it for $50 if it's worth so much more?


This. Deal sounds too good actually.






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TIGRLEE
LSU Fan
North Louisiana
Member since Nov 2009
21379 posts

re: I need some advice on this buisness deal


Needs ton of work.
Luckily my buddy happens to be in that line of work.. so the expenses are minimal






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mpar98
LSU Fan
Baton Rouge
Member since Jan 2006
4758 posts
 Online 

re: I need some advice on this buisness deal


deals too good to be true usually are





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TheHiddenFlask
Clemson Fan
The Welsh red light district
Member since Jul 2008
16898 posts

re: I need some advice on this buisness deal


My first thoughts:

Environmental liabilities missed in the appraisal
Tax Liens out the ass






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Janky
LSU Fan
Team Primo
Member since Jun 2011
8051 posts
 Online 

re: I need some advice on this buisness deal


quote:

Luckily my buddy happens to be in that line of work.. so the expenses are minimal


I would say the fact that he has his own equal amount of money in the deal is a positive, but........






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eazyeric23
LSU Fan
Member since Dec 2009
270 posts

re: I need some advice on this buisness deal


quote:

deals too good to be true usually are


This^^^^^






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tigerforever7
LSU Fan
Baton Rouge
Member since Aug 2012
174 posts

re: I need some advice on this buisness deal


Really research this and find out the details. Somethings missing. Get all the numbers from your partner who's in this line of work and think about financial situations you are in. Everything is timing in business. Make sure its the right time for you, get all the numbers, clarify with your agent( cause something up) and make a joint decision





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TigerDeBaiter
LSU Fan
Member since Dec 2010
2691 posts

re: I need some advice on this buisness deal


Is it way below the flood plain or anything like that? Building a massive pad isn't cheap. That's the first thing that comes to mind.

Also, why would he ask you to go 1/2 if that's all there is to it? Just a question to ask yourself. I wouldn't give up a potential $40k just because we're buds. But maybe that just me.

Also:
quote:

appraised
When?
quote:

Very sell-able and desirable area.

How long has it currently been on the market, or is it?

I'm just trying to help you find any negatives. Good luck






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nolanola
Member since Nov 2010
4584 posts

re: I need some advice on this buisness deal


Only if you can afford to loose the $50k in worst case scenario.

A buddy of mine did this with his friend who is a "professional" flipper and it hasn't ended so well. He hasn't lost his money but the house is now in the rental market so he didn't get his money back either.






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GFunk
LSU Fan
Denham Springs
Member since Feb 2011
8539 posts

re: I need some advice on this buisness deal


Order a home inspection. Make sure you get title work done (IE-research the chain of title). Talk to a realtor who can access MLS to give you the background on the property's history.

If all comes back well, then consider it. If not, you may have spent a few hundred to keep from losing a few thousand.






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MikeD
LSU Fan
Baton Rouge
Member since Jan 2004
1406 posts

re: I need some advice on this buisness deal


quote:

Also, why would he ask you to go 1/2 if that's all there is to it? Just a question to ask yourself. I wouldn't give up a potential $40k just because we're buds. But maybe that just me.


This.

Seriously why would he bring you in this deal if it was such a slam dunk?






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redfish99
LSU Fan
B.R.
Member since Aug 2007
4832 posts

re: I need some advice on this buisness deal


If you've done business with the guy in the past with I assume profitable results.......then why are you questioning this deal? I would have to see comps of the area to believe for myself what potential is. Obviously needs clear title and diligent inspection. Good luck





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TigerDeBaiter
LSU Fan
Member since Dec 2010
2691 posts

re: I need some advice on this buisness deal


I'm pretty sure he was talking about raw land. That's the way I took it anyway.





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Blackbeard
LSU Fan
Amite River
Member since Jun 2012
150 posts

re: I need some advice on this buisness deal


quote:

Make sure you get title work done (IE-research the chain of title).


Have an abstract done of the property...cost about $250...any title company can do this. People dont realize that taxes and liens can continue to be attached to the property....good luck

If you need a referral for this work...I can help.



This post was edited on 12/4 at 9:38 am


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LSURussian
LSU Fan
Baton Rouge
Member since Feb 2005
81785 posts
 Online 

re: I need some advice on this buisness deal


quote:

Property apprasied for 140k

Have you actually seen the appraisals?






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C
LSU Fan
The Woodlands, TX
Member since Dec 2007
21629 posts

re: I need some advice on this buisness deal


There are a lot of foreclosure deals like this on the market. Just do your homework.





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Crbello4Hiceman
LSU Fan
Lurking
Member since May 2011
438 posts

re: I need some advice on this buisness deal


Make sure to factor in transaction costs on the back end (realtor fees, closing etc). That can take a big chunk out of your margin. Also, keep in mind how tight financing is right now, even if people want to buy your place. There is always the chance that you might have to lower your price to get the demand up for someone who can actually get the financing to want to buy it.





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StrangeBrew
LSU Fan
Salvation Army-Thanks Obama
Member since May 2009
13737 posts

re: I need some advice on this buisness deal


Consult an attorney.







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