I just recieved a call for a seller that I dont think I can help in their situation.
The house(3,2,2/1300sf) is in good shape and a great area and is vacant
They say they just want out but what can I do short of a short sale which I doubt if the bank would go for at this point? They are current on payments
just refi’d @ $295K
$ 2000 mo payment piti but not including HOA @ $ 39 mo
1500 rents
apraised @ 310K but they say houses are going for a little less in the area
FSBO@ 290K so they are willing to take a loss
The high mo payment makes sub2 undesirable, probably could not get that much on a CFD sell, any ideas?
Where do you live? I just offered $15,000 for a house that will rent for $495 and all it needs is carpet and paint. I believe I can find a hundred or so of these. I would not even look at your deal twice as a rent to hold or even a lease option deal. The name of the book you read must be how to go broke fast buying high over valued negative cash flow rent property. Find another deal. Walk away even if you lose $1000 earnest money.
Hey Ted
Im in Vegas and that is just the going price of homes in certain areas around here.
I was debating walking from this one too but I had a couple experienced investors that know the Vegas market tell me that this does not look to bad. The monthly payment is high for a sub2 but not immposible to get on a CFD sale. I am still debating on this one but I have to let them know today. HMMMM
Thanks, Jake
This is NOT a deal. If an experienced investor told you that it was, then I’d question his experience level because he either doesn’t know what he is talking about OR he is VERY experienced. Only a very experienced investor could take this and make anything on it. And that said, most experienced investors wouldn’t bother because there is not enough there to warrant the risk.
Why was the appraisal done? You said that they just refi’ed, so I’ll assume that you’re going off that appraisal. If so, know that refi appraisal always come in high in value, and sometimes are greatly inflated. I’d find out what the true value of the property is first. You’ll likely find that it may be as low as $280-85K. If that is the case, then you be glad that you didn’t go for it.
Let me point out that I am NOT familiar with the Vegas market, but in general, if the market rents are $1500 for the house, it’s going to be pretty difficult to get someone to pay $2k + a month, even on a CFD. Let’s assume that you get someone in it on a CFD for a purchase price of $310,000 and a monthly of $2100/month. You’re making $50 month on the property and $20,000 on the backend. Not bad, right? Well, no because out of that $20K there is closing costs for both buying and selling, AND since you used a CFD, it is counted as a sale, and you’ll have to pay the taxes on that sale. My guess would be $5 to 10K based on your current tax bracket.
Roger, thanks for your post. Im not going for this one but I had the idea of offering to try sell it for them on a CFD and get a $5K middleman fee if I can get them $10 or $15K as a down. This way I can make a little $, and still help them. I would have them pay for the advertising and show prop. but I would help with everthing along the way and do paperwork. Of course I would come up with an agreement so im not liable if it does not sale. Have you ever done this or heard of someone doing it. Your thoughts?
Thanks, J
Sorry real, but what you’re proposing to do is act as a real estate agent without a license. That will get you in some serious legal issues, so don’t do it. The only way that you can earn money off of this is if you are a buyer or a seller. Unfortunately, you have to be a buyer before you can be a seller, and I still don’t see a way that you could profit by buying this property.
I understand that we, as investors, tend to want to help everyone that calls. However, you don’t want to help them at your expense (don’t buy anything that isn’t a moneymaker). Help doesn’t always mean buying their property either. What is their pain? Why are they selling? You have to know the REAL reason before you can begin to help them with their problem. This is true even if there is a deal there. If you don’t know their pain, you can’t truly structure a win-win deal, you can only make an offer and hope that it works for them.