Cleveland Property

Ok just want to run something pass the forum. There is a property in Cleveland that the owner owes $38,000.00. She was renting it to section 8 these folks trashed the house. She want to pay off the loan $38,000.00 and walk away with money. She has not given me an exact figure of what she would like to walk away with. The house was appraised for $95,000.00 prior to section 8 trashing it. It now according the owner appraises for $76,000.00.

I am going to offer her $10,000.00 and pay off her loan of $38,000.00 the best I can wholesale it for correct. $95,000.00 - 20,000.00 = $75,000.00 * 70 =$52,500.00. $52,500-$38,000.00 = $14,000.00.

Another exit strategy is keeping it and getting hard money. Does this example lend itself to the hard money criteria? How about Sub2 deal. Just trying to figure out the best method to deal with this situation.

Howdy Meverett24:

Hard money is pretty much for buying and rehabbing and reselling. Most are for a year or less. If you have the cash to give the seller and do the rehab you could do a sub2. You could also do sub2 and then just wholesale to another rehab investor. You have several options when you get a good deal like this.
A HML will loan up to about $66,000 depending on the ARV appraisal. You should be able to flip it for $60,000 and make a few quick bucks. You may want to go all the way and fix it up and retail it and possibly make even more money.


how did this transaction work out?

It didn’t I could not figure out how to structure the deal. It appeard the owner wanted to much for the property and there was no room for a good deal to work.

I appreciate the update. It’s too bad that it didn’t work out financially as a better scenario for you.

Are you located in the Northern Ohio area?

I am actually in Maryland. I found out about this deal through the owners daughter who lives in Maryland.