Could this be a deal? Quick Please

I have someone who e-mailed me. Here is our e-mail conversation. Please let me know how I should persue this. I am a newie investor.


I have a few questions:

Why is it that you need to sell?

I have 45,000.00 in debt I need to clear, (18,000.00 after reduced agreements), My credit score fell below 520 during the botched attempt (6 weeks) to refinance, 11,000 in fees 10.2 interest and 72% cash out. I am glad it fell through. Bankruptcy, debit consolidation, liquidation. My mom rents from me now and has lived there since it was bought and built. In 2001.

What is the mortgage owed on the property?


Is there any judgments or liens on the property?

Not yet

Is there any repairs that need to be done? What is the estimated repair cost?

New unit – 3 years old,

Do you have an estimated market value for the property after repairs are finished?


How much is it renting for?

750.00 + 96.00 = 846.00 association fees mkt could get 1100

Can I wholesale or should I do a subject to, could use some advice?


It sounds like you might have a deal here if the price is right.
Why don’t you meet with this person and see what the lowest price
they would take would be. A the famous question: “If I can pay cash and close quickly, what is the lowest price you would take”? I would also present a multiple offer offer, one being ‘subject to’ and the other one being “all-cash”. Get a purchase contract signed on it, open escrow as an ‘assignment’, collect your fee from your ‘wholesale’ buyer and ‘assign’. Then tell the seller you are closing in your partners name for tax reasons.

You can find some wholesale buyers in the paper under the “We Buy Houses” ads. Check all the internet lead generating websites out there also for investors to ‘wholesale’ to. You could also check your local investment club.

Best Regards,
Jeff Adam

What is the mortgage balance on the property?

It appears to me that the seller’s $45K debt is personal debt (credit cards maybe). It also appears that the seller’s tenant is renting for what the seller needs to breakeven (PITI plus association fees), so I might not expect the loan to be in default, yet.

What is the tenant’s lease term? Is there a long term lease in place that must be honored?

What is your own estimate of the resale value of the property? Do you have comps to support the $225K value the seller is telling you? If the numbers are good, and with over $100K equity in the property, I don’t understand why the seller (even with poor credit) could not refinance to get the $18K he needs. Could it be that the appraisal did not support the equity the seller claims is there? Verify the ARV.

You don’t know enough yet to determine what to do. Wholesale is just one possible exit strategy; Subject To is just one possible acquisition strategy.

If the market rents are really $1100 and if the PITI is really about $750, I would be inclined to buy Subject To and hold the property as a long term rental just for the cash flow. I can always sell later for full market value if the need and opportunity arises.