A Potential Deal?
I found a 4bed-2.5ba house in perfect condition. it has been on the market for 5 months and a motivated seller. here is the numbers:
comps 160k-165k
list price 150k (owner seems to be firm on the price)
monthly mtg pymt 1668 amortized 15 yr fixed
mortgage bal 136K+
rental on similar property is 1200
my plan is sandwich l/o but the monthly mtg is a bit high. will negotiating with the owner to ref to 30 yr lower monthly pymnt a good idea?
another thing, it has a contract with a realtor for 6 months. will l/o constitute a sale, and that the realtor can claim his contract with the seller was violated?
I am sorry but when I use your figures and figure the interest rate it comes out at 12.41% something is wrong.
To make this a deal your are correct you are going to have to get that interest down and extend the payment time out for 30 years.. You should try for a 30 year amortized. $136,000 at 5.5% is a monthly payment of: $772,19 a month. Now you got something.
Straighten the nice people out. I know blame it on the Broker he gave you wrong information. Whatever.
Lucius
One thing regarding the relator. If they have a 6 month listing contract a l/o will most likely not cause a problem as long as you do not exercise the option before the contract with the relator expires. Be careful though, if the relator finds out they MAY get their panties in an uproar and cause problems.
If a property is properly priced, and adequately exposed to the market... it should sell.
If the subject's comps are from $160,000 to $165,000, it should sell for $150,000 in a heartbeat.
Best to confirm the applicability of the comps, and the subject's value before you proceed.
i forgot to mention that the monthly mtg includes PITI.
market here in austin is sluggish and you will find many houses with prices below market.
thanks for your replies. this is a great website!
yes, i still have to see the docs. those #s above are what the seller remember when we talked. thnaks again!