Help.. Is This Worth Doing.....
I came across this FSBO. It is a nice little house in a good and stable neighborhood. Lot of home owners are 1st or 2nd owners of the house for a long time and ofcourse the houses are paid for. I have 2 questions.
1) Since the house needs about 10k in repairs the owner has listed it for 140k. He is asking that price because an identical house across his house sold for 150k last year. The CMA shows the houses got sold between 8-77 days and are at 140-150k range. The house is paid for and the owner is not ready for owner financing or any other terms. All he needs is cash. He doesn't want to fix the house. I took a tour of the house and it is well kept and needs about 10-15k in repairs, all cosmetic. I told him that I would get back to him.
I came up with this idea;
He doesn't have to come up with the money, time or effort to repair and sell the house. I will do all of that, ofcourse for a profit equal to rehab cost, i.e. if the repair costs 10k and the house gets sold for 150k, I get 20k (10k repairs and 10k profie) and the owner gets 130k. Is this doable, if so, how can I structure this deal.
2) Since most of the houses in this area are paid for what kind of deal structuring will create win-win situations.
Any idea is very appreciated.
Thanks in advance
You could structure the deal just as you put it in your post. That doesn't mean he will accept it. You said he needed cash, but you didn't say how much he needed. Why is he selling? Why does he need the cash? How much does he need? How soon does he need it? Answer these questions, and meet his needs, and you will have created the win-win situation you write about in item 2.
What are the things I do so that the deal happens. i.e. Do I get an option on the house so that I can sell the house without being a realtor? Get an agreement drafted by attorney for all the things we agree upon? Pl. let me know what else can be done?
Thanks
Well, step one is finding out what the sellers needs are. Once you know that, the rest will be obvious. You don't need an option to be able to sell it. You only need ownership interest. That could be in the form of an option, a purchase & sale agreement, or contract for deed, etc. But, your acquisition method is dependent on the needs of your seller, and your exit strategy. So once you have your sellers needs pinned down, and you have identified your exit strategies, you will then figure out what acquisition method will satisfy both needs. Obviously you can post here to get help.
Good reply bnorton!
Make sure that whaterver form of contractual agreement that you use it is assignable and record it at the courthouse.
[addsig]