I’ve come across an investor who buys “pretty” properites as well as junkers. Want to run this scenario by y’all to get your professional advice:
TH built 1992 - purchase price of $120K
approx 1350 sq. ft
Listed ( with a realtor) for $289,900
Has been on market for 70 days - realtor ran newspaper ad this weekend “Motivated Seller ready to act quickly” so I called it.
I ran some “comps” using various websites that have been mentioned in this forum - found the last 3 similar properties that have sold on this street or one over went from $269K to $274,900 within the last 6 months.
Realtor said owner had a contract on a house in PA but it was contingent on selling this one and it fell through. Has not had much interest in the house, the owner really wants to sell and move to PA - her family is there - may need to rent back for a short while until she gets another PA house under contract. I haven’t seen the house but supposedly it has new carpet, new HVAC system (I would estimate probably $5K in powerwashing the deck, new interior paint, and other things that need sizzle and including in tht $5K a repair contingency before I would even go look at it).
I tried to get specific financial info on the mortgage but all the realtor would tell me was that it has no liens but it has a second mortgage, I don’t know what amount.
The investor will buy at 80% ARV and do an assignment. So what do you think of this wholesale scenario -
Retail Price (going by comps) - $272K
multiplied by .80 - $217,600K
less Repairs - $5K $212,600K
less assign. fee - $2500 $210,100
When I said I had someone who could close with cash in 5 business days, he really perked up. Of course he asked if this would be at full market price and I said no, but I know someone who will close with cash in 5 days if the numbers are right. This investor will also do creative financing with the owner so offer to her could be higher. I said it has to make business sense for the owner.
I believe the owner really wants to get out of this property. What do y’all think?
Equals max. offer price - $210,100