Buyers sometime do multiple offers on the worst homes. Since I flip properties myself, I like to buy fixer uppers. A home in the worst condition makes for the best fixer upper.
One home considering was this one. The entire home was on a 2 degree lean to the side, had a very low and ultimately unusable basement, the stucco on the ceiling actually fell off the ceilings, and it smelled worse than it looked. Great fixer upper and was perfect for what I wanted to do to it.
This wretched home is just north of Danforth. It is not as highly valued as the upper beaches or beaches. It would sell in fixed up condition for about $350,000 if you are lucky due to the poor height of the basement.
My offer was placed at $150,000 with no conditions. It was listed at a price of $199,000. It actually sold for $226,000. Who ever bought this property is a fool! This property will need a minimum of $120,000 in repairs plus land transfer tax, other associated fees, plus closing costs, etc.
There will be no profit for the investor at this purchase price and they will experience a loss.
Why would any investor pay so much? Because they didn’t calculate their numbers properly. I use a special calculator that takes into account all costs of flipping. I know exactly what I will make and what is a good or bad buy. This calculator that I have built protects me from over paying.
Bottom line: don’t get sucked into the FRENZY of the market. If you are to compete against fools in a multiple offer bid on any home and lose, feel good in knowing that in most cases the loser will actually be the winner!
