Hey guys…I was seeking some advice on what to do with this deal. I have a motivated seller with a property in Lake Worth, FL (Palm Beach area) that I’m looking at right now. She wants to close in 30 days so she can move on to her new house so she needs to get paid fast. The house is on a golf/country club and was originally listed at 380k back in November through her realtor. The asking price is now down to 350k. From the few comps I was able to check out (seems like a lot of people keep their houses for a while in this community), it’s looking like 350k is about right for this kind of house in this area. Here are the specs:
Community w/ Golf Club, Restaurant etc.
2 Story
3 Br
Loft
TV Room
2 1/2 Bath
association fees : 130/mo, electricity: 160/mo, lawn care: 50/mo, taxes: 2300/yr, water&sewer: 60/mo (approx $590 total in monthly expenses outside of mortgage)
property was just built in 2001 and is in pristene condition according to the owner with the exception of a toilet needing to be fixed.
owner owes 240k on mortgage and had a 7k penalty she has to pay for selling before her mortgage terms are up.
my partner and I don’t want to buy and hold this…we’d like to flip it to another investor as we’re up in NY and would prefer to do our first buy and hold locally. We’re thinking of offering 290k and only going to 300k max as an offer if we have to, taking a 10k profit and selling the contract to an investor for 300-310k as a result. The selling point is that the buyer can then either sell it to a retail buyer for 330-340k (below market so it goes fast), rent it or they can lease/option it to someone.
My questions are,
1)does this sound like a deal that will be appealing to the average serious investor and do those numbers work?
2) am I missing anything in this deal that I should be thinking about (other creative options to make it more appealing to the seller or buyer, etc)?
Any feedback is much appreciated. Thanks in advance guys and gals…
Darius
Even though it’s in pristine condition by her standards, doesn’t mean that an investor wouldn’t come in and change out the carpet and paint. So figure in “repair” costs when you’re asking yourself if it’s a good deal for another investor.
Kes,
You are in Baltimore. . .in Florida. . . I realize some people do this nationally but that is usually with an extremely BIG network that has been built up (or bought into) over time.
How 'bout finding some deals in your backyard to get the experience you need to transact the long-distance deals? And yes, no matter what market you are in, there are motivated sellers in all of them - including the red hot east coast markets.
I wish you luck and can tell you from my own experience trying to be all over the place and out of state that it’s best to gain local experience first.
Vida,
Thanks for the advice. Believe it or not, that’s actually what I’m trying to do and has been my plan from the beginning. It just happens that I’ve run into deals with motivated sellers in those areas through friends that know that I’m into real estate and I wanted to move on them in some fashion and just see what kinds of deals I can get accepted. Going forward, I’m going to try to put my focus totally on things locally though as u said…at least for now. Thanks for the feedback. Any opinions on the deal though? 
Thanks
Darius
She owes 240 plus a 7K penalty - if you buy the property for 247K, you are right at 70% ARV (using the figure 350K that you gave). Now I know alot of people don’t use that figure - some go as high as 80% - which would mean that you would need to buy no higher than 280K.
Remember that you want to wholesale this (“flip”) contract to a local investor down there so there must be enough room in the deal for BOTH of you to make some $$. Depending on who your end buyer is, they will have a criteria as to what they buy at (no more than 70% minus repairs, etc). and they are the ones who will be holding the property while they decide what to do with it (which costs $$). So you will have to be very modest in what you are asking for an assignment fee or you will not get any smart takers.
You’re going to want someone who can pay cash for this because the holding costs, along with all those fees you listed, will eat up profits quickly for your end buyer.
Vida…thanks for the feedback…I should have known about the 70% thing…it’s only in like ALL of the wholesaling materials I’ve read as a guideline (duuuh…lol). I definitely won’t forget it on future deals (local ones first…I know!) 
Thank you
-d-