Idea's/Advice?
I should probably give up on this deal but I've been working on it so long that I am just trying to prove to myself that I can move it. There must be something I'm not seeing cause everyone has passed this up.
Heres the deal
Home in downtown Atlanta...middle class neighborhood. Can be Section 8
Appraisal for 191k-I have this.
Owner will finance or cash out for 152k.
Needs sprayed for termites...other than that has already been rehabbed but could use some curb appeal that would probably boost appraisal even more. I put this property under contract for 45 days...had many people interested but always backed out. My contract is expired but the owner really wants to get out of it so she is open to anything I can come up with. Any idea's or advice on what I should do with this property? I hate to just forget about it with that much equity. Thanks
What were you trying to sell the property at? Were you offering any terms? How were you marketing the property?
We need to know what you've already tried before we can give you advise on what to do next.
I tried assigning the contract to other investors for a fee. Advertised on this site and a couple others. Over 15 investors looked into the property and none gave me a good reason for not wanting to take advantage of the deal. I wasn't looking to make alot of money off the deal or put alot of money in so figured that was the best way ..and would still like to not put alot of money into the deal.
I have a few thoughts.
1. All properties have a range of values. While you may have a $191k house, it may take 6 months to sell at that price. Price it at $185 and it may sell in a month. An appraisal, in my experience, always comes up the highest price that any reasonable person would pay for the property. As an investor you want a much more conservative number. It could be that the house isn't worth the $191.
2. At $152k that is only buying the property at 80% of FMV assuming the $191k value is correct. If an investor is going to pay all cash, 80% of FMV is not acceptable (in most markets).
3. What you may do is actually retail the property. You could advertise the property in the newspaper and some flyers around the neighborhood saying "WANTED: THE PERFECT NEIGHBOR" or such.
You can sell the property at $185k, get the people a new loan, and do a double closing. This is where the buyers money will go to pay off your purchase agreement and simultaniously pay off your purchase contract with the seller and the underlying mortgages. Title transfers into your name (or preferably your s-corp) for only a few moments.
There WILL be closing costs but $185 minus $152 = $33,000! My guess is that you'll have fees that won't total $1000 out of that.
If you really wanted to go crazy you could even sell it at $179k which would probably sell pretty quickly!
What you need to do for a double closing is one of 3 things:
1. purchase the property sub2
2. purchase the property on land contract/contract for deed
3. simply use your purchase agreement with the seller.
These are listed in order of preference. In all cases you need to record an affadavit and memorandum of agreement at your county recorder's office. This is required when the title work comes through it will show that you have marketable title (or full legal title in case of buying sub2) which allows you to resell the property.
TO sweeten the deal, offer to make the payments for the owner.
I would definatly look at retailing this property to an owner-occupant.
GOOD LUCK
Thanks so much...im gonna try to do subject to. Thanks for posting the step by step thing...easy to follow
I have one other idea but I don't know if its legal. Can I offer to by the property with owner financing...then turn around and ask for a higher down/payments/price? Thanks again.
sub2 and contract for deed are both types of owner financing.
You certainly can take the property sub2 the existing mortgage and then sell it via contract for deed with a higher down payment, interest rate, and purchase price. In fact this is a very profitable way to do business. However, since you are new to investing, it may be nice to take the chunk of money to use on your next project.
Your last question was a little vauge so let me know if my answer isn't what you're looking for.
That was exactly what I was looking for thank you so much you are very helpful.
If things continue as before,(no buyers)
consider asking when parties see the property - "what appeals to you and what's are your concerns" - after each viewing to help you pinpoint it's "+" and
"--" out the property.
Mark