Need Opinion On This Deal Please
Hello investors,
I have this lady with a house worth $110K. It needs 4K in repair. She has a loan for $70K. She needs the loan taken care of and a little in her pocket.
So here is my strategy:
I take the loan 'sub2' and give her 1K in cash. I then place a handyman special in the paper(way too many people looking for cheap homes in need of a fix) and simply deed them the house using their conventional loan or FHA loans for $90K.
So I get 90K-71K = 19K minus the holding cost for profit and did not do any repair.
What do you think? any legal problems?
thanks, hrash
sounds good,
If you like tradional buyers
Sounds like a great deal. You may even be able to defer the $1,000 until after you find a buyer.
The biggest obstacle you'll face is finding a buyer that can qualify for a loan and STILL want a fixer-upper, though it is possible.
Also, if you take the home 'Sub2', then there will be a seasoning issue for your buyer's loan. No seasoning loans are harder to get and have more qualifications, again limiting your buyer's pool.
If you want to go this route, it may be better to either get it under contract with an option or an assignable purchase agreement, unless you have a mortgage broker that is up-to-date on his loans, and can get your buyers financed.
Roger
I think rajwarrior was onto something with the assignable purchase contract, then you can sell the paper. Another potential problem, depending on how much TLC the property needs, is that some conventional lenders may not make the loan if there are substantial problems.
Why not twist things around and sell via L/O? Get $ down, a spread on the monthly and a payout at the end?
If you can find a conventional buyer that would be best since Cash is King (Not you John)
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