Chris Prefontaine walks through selling a non-habitable probate house for $140k. A roof and AC could make it livable for rent-to-own buyers. Market it three ways at once: standard listing, rent-to-own candidates, and wholesalers. A $60k rehab could yield $100k profit after a $210k sale.
Chapters
Ask your insurance agent about builder's risk and liability, or better yet, give them what you have and say, how would you insure this? Because they can. You guys asked me yesterday, someone did, about houses needing work. Dana, was it you asking about you can do houses that need work? Who asked that yesterday?
It's me. I actually have, I have somebody who would like me to list their house. That's a probate house. I was thinking I'd like to get it, but it's a whole lot of work. And I just was, I've had a couple investors look at it and I just was looking, wondering if there was creative ideas that you might have.
Is it habitable?
No.
It's not habitable. Okay. 2 things for you guys then, just for the sake of time here. When a seller says it needs work, a lot of times they think it needs a lot of work, right? And it really doesn't. So You say, is it habitable? If it's habitable, short answer is we can work it with the rent-to-own and pass everything on to the tenant buyer who comes in, who might be a builder or handyman. Right. You'd be amazed some of the things they've done with these houses we give them, because a lot of handymen/small mom-and-pop builders aren't financeable. They hide a lot of their income. The rent-to-own is a great vehicle for that. They'll take that on and they'll build sweat equity in that house. And Nick and the coach will help you price it. That's the answer. If it's habitable, it could be habitable with a roof and an AC. What'd you say? Sorry.
If a roof and an AC were done, it could be habitable.
Oh, gotcha. Okay, so it might be worth looking at it. You could dig in deeper with that with the coaches. Or if you watch that lead gen thing, you'll get some networking going with like the We Buy Big Houses franchises. I encourage you to do that and some of the other rehabbers in your area. where you can refer back and forth because they would love you to refer them that deal, right? Number one, if it's the right price.
I had a contractor out actually who was interested in a flip and a fix and flip on it. And I've had a landlord out who said he wouldn't be afraid to take it, but he figured it'd probably be a $60,000 investment before he could rent it.
Do you already have this listed, Dana?
No, she's asked me to list it, but I don't think She's in Massachusetts, and I don't think that she's going to be able to get— it's, it's still got a lot of clean out that needs to be done. And I just was trying to find some way to do it that she could still get some of her stuff out. And, you know, she— I had talked to her before he died, and they were willing to do some owner financing on it. It's owned outright. But I just was trying to look for creative ways to do something. At one point I thought it might be something that my kids could take on as a project, but they're not around. So.
All right, real quick. How much does she want for it?
As much as she can get. I don't think— I think her best bet on the open market would be $140,000, and I don't know if she could get that.
Okay, let's get to that guy who told you. I just want to give you some math, you guys. What's it worth if it was fixed up decent right now? Fixed up.
$295,000.
Okay. And what's 70% of that? Somebody? $200,000 ballpark. I'm just giving you rough numbers, Dana.
Right. I understand the 70%, ARV minus 70% minus repairs.
Yeah. I want to do it from my head. So, so now you're down to $140,000. What does she owe?
Zero.
Okay, so what's wrong with you tying it up for $140,000 and just selling it to a builder or a wholesaler, or exploring with the coaches the option for Antone too at the same time? We'll look at both. In fact, if you tied it up— like, I'm just thinking aloud with you guys— you tied up for $140,000, um, you would simultaneously market To a rent-to-own candidate, handyman, builder. They can come in, no banks, and you'd market it to wholesalers. You market it both.
Okay.
And we can work on that on the, on the, on the, on the mastermind or the apprentice calls. That's what I would do.
Okay.
Definitely dual market it. And there's plenty of money in there.
Okay.
Example, rent-to-own marketing. You'd want to leave some money on the table for the, you know, for the person coming in. So if it's all fixed up at $295,000, but they got to put $60,000 into it, you could, you could still, you could still sell this thing for probably $210,000, low 2s. You make almost $100,000 on this thing. Not sure where to get started? Go to smartrealestatecoach.com/coaching. Get going for free books, strategy calls, and a whole bunch more. We're going to help you get going the wicked smart way. We've been after this for over a decade doing exactly that.
I'm not sure. They have never insured the property. And when title transfers, if you don't insure it right away, then you've got issues.
You would insure it when you buy it.
It's not insurable. Not insurable without a roof and AC. And it's never going to pass the 4-point.
It's insurable for rehab. You get builder's risk insurance. See your agent who knows this, but builders risk and liability.
Okay.
Yeah, I built— I've done a ton with those builders. Ask your insurance agent about builders risk and liability, or better yet, give them what you have and say, how would you insure this? Because they can.
Yeah. Okay. I have no experience there, but okay, great.
