What Offer Would You Make On This House?
House is a 52 year old 3 bedroom, 1 bath, brick ranch, 2 car attached garage, located in good area, very close to good schools, shopping, etc. 20 miles NW of Pittsburgh. Great back yard with wood fencing all around. Owner inherited it, owes no money on it. I met with him and he's very anxious to sell (his words). Costing him money at this point. Has had it on the market since September through BlueEdge realty, a do it yourself type of marketing. He pays them 2-3% commission, but shows it himself. No multi-list. Has had only 6 people look, no offers. Asking price was orininally set at $139,000, reduced to $134,000. Appaised at $140,000. PROBLEM: entire basement is in need of water proofing, black mold in some areas. Has an old water shed (from a well in the early years) in the basement that seeps in water, as well as the entire basement shows signs of damage. ALSO, the house is old and needs updated, awnings taken down, re-painted, etc. cosmetic. Keeping in mind I don't have any of my own money to spend, can you give me suggestions as to what kind of offers you might make? Also, I can't take out a loan right now because I'm closing a house May 17 and can't have changes on my credit report until it's over. I appreciate this site and your suggestions! 
[ Edited by JeanMarie on Date 05/03/2004 ]
Hi JeanMarie,
If the owner is that motivated maybe he would do short term owner financing? If he would be happy with a small down payment (could you borrow this?) you could cash him out (1 yr for example) when you are able to refinance (or sell). You really need to do a thorough walk through and factor in all the fix up and holding costs. Are you going to fix up and flip or L/O? What will be the value AFV after fix up? Good luck!
I am not sure if you want to get in over your head on this one. You say that there is significant damage, if you do not have the money to fix it and get the loan right now, you may be better off just letting this one go. Remember, that timing is one aspect of any investment that may or may not be on your side. If this other house that you are closing on is a good deal and you have profitable plans for it, than maybe you should look into more properies like it.
How much investment experience do you have?
Remember also, the basement is the foundation of the house, if it is in poor shape, the rest of the house may not be far behind.
Strikes me both pushcart and spriddy have given you good advice. Buying no-money-down on a land contract is the easy way to go on this one but raises the problem of how to fund the needed re-hab when you've got it.
Questions:
How can it be costing the seller money to hold if he owns it free and clear? Are the Taxes so high as to amount to a serious concern? Surely even in Maine the heating season is over.
Tell us about the other deal. After it closes will you have cash to do the repair with?
Thanks for all the replies! I really appreciate everyon'e input. After my other project I won't have the money to put into rehabbing this home. The owner is paying taxes and insurance on the home, which he say is very costly to insure a vacant home. (?). He's very anxious to sell.
In this case I would suggest throwing a low ball offer out and see what happens. If you could make $2000. lets say for assigning the deal and the assignee got a desirable deal it might turn into a win-win situation with money in your pocket. Good luck.
maxwellpropertyinvestment, gets it. Tie up the property with a contract subject to inspection, Then call every investor and wana bees you can round up. You will soon learn what the property is worth wholesale. At this point renegotiate with the seller for a lower price or assign to one of your investors for your profit. This is so easy but does take some skills to pull it off. Go get um tiger you cant sit on these things. Come on make your luck, or at least learn what to do different next time.