Fire Damaged Home. ARV 130k-155k. Repairs 35k-55k. I would Rehab or Assign.


"Ugly Miami Homes" I am going to throw you a bone! No actually I am going to throw you a T-bone steak!

Say thank you! Actually say thank you very much!!

Ok ask your seller to subordinate her price of $18,000 dollars and go get yourself a Hard Money Loan for $60,000 dollars. This way you handle the remodel / fire repairs and this deal is essentially a “No Money Down” deal.

You will need to redo your contract so it reflects this agreement and obviously your friend wants you to be successful.

Your seller since she is your friend will get her money in about 6 months and you will make $50k to $75k out of the deal!

This is the first day of the rest of your investing career.

Ugly, this home will be beautiful!



You need a hard money lender, tell them your looking for a $60k loan in 1st position on a $130k minimum value home!

Subordination means your seller agrees to take a 2nd trust deed note for her sale price and wait 3, 4, 5 or 6 months to get paid. This allows the hard money lender to place their money in 1st position for a 46.2% LTV loan!

You need a hard money lender who strictly loans money based on property and value. A 203k loan takes a lot to qualify for it and you have to supply a written plan with financial cost projections.

One thing before you get a lender is you have to be positive (IE: get estimates) of the cost of construction and rehab as there is nothing worse than going bankrupt on your first flip!

I will check my Miami connections for hard money lenders! Check your PM in a few days!

In the mean time get a new contract with your seller agreeing to subordinate (Take a second) for one year or 18 months your agreed contract terms and get it in writing and signed. Make sure you explain to her that you expect to fix it and re-sell it in 4 to 6 months but you need her to agree to a 12 to 18 month note just to give you some leeway in the event of something coming up.



If this lady is truly your friend then you should have done two things:
  1. Waited for her listing to expire so their were no realtors involved.

  2. Disclosed to her the fact that you were going to buy as an investor and sell as you saw fit and that you invest in real estate to make a profit.

There should never have been this misunderstanding as it’s not rocket science.

I will bet you her agent is driving this dissatisfaction as she will not get any commission on your profit and now has to perform as the seller now realizes with a little marketing their are buyers for the property at more than $18k or $20k.

Chalk this one up to experience as you should have gotten access and keys to this property when you settled on a contract and no one should have been the wiser as your reason you need access is to show contractors and sub-contractors the property for assessments of damages and repairs.

No one should have ever known a few potential buyers were in that mix.

However having probable done this myself once or twice 33 or 34 years ago I understand it’s a learning experience.

Good luck,


I a similar situation involving a house that was fire damaged. The house was under contract with another wholesaler but she could not find an end buyer so I ended up coming into the deal and bringing a cash buyer in. The thing is the house was in such bad shape that no one would take the 22k that she was selling for because it need over 50k in repairs although the ARV was listed at 120k. I agreed to pay 17k but she wanted to stay with the 22 and my buyer ended up passing on the deal due to the rehab costs. I had the contract all signed and had to walk away because of greed and not deal was done and now the house is still there and no deal done.