Tell Me If My Instincts Are Correct On This Deal
I spoke with a seller yesterday who wants to sell a home. He is a disgruntled landlord who has a property, and wants to sell. Here are the details
ARV: 204,000(reliable comps)
He owes:176,000
Asking Price: 194,000
Repairs: None, in move in condition
Okay, I know what everyone is thinking...... He wants WAY too much for the property and, even if he didn't, he owes so much on the property that it doesn't give an investor much wiggle room for a solution.
I have the mindset of a wholesaler because I always want to buy property REALLY cheap, so I just want to make sure that I am not missing a creative solution. Like having the seller carry a note for the equity, etc , etc .I will probably bird dog this if anything, so if I am dealing with an investor who would like to keep this as a rental, do I have a deal at all?
BTW: the seller is open to carrying a note.
Thanks guys and forgive me if this was a stupid question.
If an investor would consider keeping it as a rental, how much would it rent for? If the property won't cash flow, you can likely forget this one as far as investors go.
Jeff
Hey,
Let's take a look at the numbers of this deal for just a second:
If he sells to you (or whatever), he nets $18k ($194-$176)
If he sells through an agent and goes through standard closing process: $14k ($204k-6% commission-two months holding-$176k).
So the truth is he is "giving" you a negative discount of $4k.
THanks guys, like I thought, this is a dog with fleas and I should pass. It's hard to trust yourself, but what I really need to start trusting is the numbers--they never lie.
Thanks,
Results
I may be wrong, but wouldn' t this deal work if you could get the seller to sell for what he/she owes on the house? If he is truely motivated, it could be a possible Sub-2 deal.
Murphy
Good thinking, tried that...this seller is motivated, but not motivated enough to give up about 20,000 in equity for 1000 for moving costs.....
Anyway, thanks for your suggestion.
Results.