Option To Purchase -HELP-
Has anybody used an exclusive option to purchase on a preforeclosure to lock in their option?
Here's the deal:
3/2 Manufactured on 1.3 Acres. NOD issued this week. Appointment with seller today.
Listed w/ R.E. agent since Nov. 03 No sale, listing contract cancelled this week.
FMV=123K to 125K
Foreclosing at $100K
FHA loan
Current Mort. Bal (unverified) 98K
3 months in rears
piti=$750 /mo
Originally I had thought of directing seller to consider a sub-2, and then L.O., This would require the 3 months rears, plus closinging and holding......however I really would prefer to W.S. this deal.
What do you all think?
Bigwave,
Unless you already have a buyer that you KNOW is willing to pay your price, a wholesale deal does not seem likely.
Here is why I think this:
1.) Not enough room, the seller owes $100k, and the value now is $125k......no beef.
2.) It is a MH, and they don't hold value.
These things lose value over time, the home, not the land.
Before you do anything with this, PLEASE verify HARD your numbers.
Make sure the value is there, and that there is a market for buyers.
without KNOWING I can sell something like this, I'd not touch it.
ask me how I came to that conclusion with MH's.......even on their own land?
Anyway, proceed with caution if you move on this one.
Me? I'd tie it up sub2, with contingencies that the deal only goes thru IF I find a good buyer, with decent option money to pay........then bank it ALL for a rainy day.
MH's are notarious for lasting MONTHS on the market, unless they are cheap, and over $100k ain't cheap for a MH.
Just my thoughts,
Jim FL
[addsig]
I am somewhat apprehensive about the M.H., however the land here is really a treasure. I would think that with some proper bandits and afew newspaper adds a L.O. shouldn't go over 6 months, but I haven't pulled DOM numbers yet.
As far as Enough room for a W.S.. The Phoenix market is saturated. People are buying at 85 to 90% of FMV on 12% to 15% appreciation in Months. I know it's a thin spread but with a VA I'm about as thin as I can get.
Any advice on how to approach the seller with that type of contingency?
This is the 4th appointment with a "motivated" seller I've had in the last 2 months and I'm getting a little frustrated. :-x [ Edited by BiGWaVe on Date 03/25/2004 ]
I guess you need to know your market area. In my area, for example, manufactured homes are appreciating quite well. Not as good as regular homes but pretty good nonetheless.
Sounds like you're not really sure what it's worth, and/or you're wary of taking the plunge without fat, www.solid.margin. If you're in Maricopa County, plug in the data into into their website, www.maricopa.gov and see if you can get any comps. Then maybe call in an RE agent favor (or just beg and promise the moon) for a drive-by BPO. I'd bet if this went to courthouse steps one of the wholesalers would pick it up and mark it up. If you pass on it, make sure you go to or follow the sale to see what happens, for future reference. My guess is you'll be wishing you'd moved on it...but it's just a guess.
Just an update...
met with seller and she agreed to sign over Deed.
My wife is an agent and so I have access to MLS and all comparables, of which there are very few and inconsistent. That's why the thing has been listed three different times. My estimate is 122k
I have read that FHA and VA backed loans won't go below 80% of FMV, however if others on this board have more info please let me know.
I am going to advertise a Lease Option with a 3-5K DP, which should cover rears. I have agreed to give seller 2k in 30 days if deal works out.
My question is: Should I even attempt a short with lender? Property was listed for 144+ days, has outdated carpet and paint, and is in the middle of other similar, semi-run-down props. Other parcels in "nearby" subdivisions are selling for $140k /acre.
I am fairly new to real estate investment. I have been talking to several people in preforeclosure...but I have not purchased anything yet (since there was no profit). Do anyone know any good postcard examples to attract motivated sellers?