I have a beautiful home under contract that was appraised at $130,000 a month ago. My seller is extremely motivated because she is being foreclosed at the end of February. The house was burnt down 2 years ago, but now the house is fully refurbished and it is absolutely gorgeous from the inside. But since the other homes on the block are not fully refurbished or in the same condition as our current home, the comps are coming in around 90k-110k. This is a 4BD/1BA/Basement unfinished. There is a 1st mortgage of 80k; a 2nd mortgage of 6k; a lien for 5k from the Borough, and two other liens at around $700 total. The seller is also close to 20k in arrearages, to bring her mortgage current. She has a 30 year mortgage @ 8.62% @ $1000/month. So total payoff of all debt, arrearages, liens, nuances, and encumbrances is 111k-112k. I don’t know what to do? I prefer wholesaling this deal, is that a possibility? How about a short sale? Some people have also talked to me about Subject-To? What is the best thing to do and how should I do it?
Where’s the deal here? Walk away or run whatever you prefer. There is hardly any equity here after all the debts and liens are paid. No deal.
Nate-WI
I agree, move on to the next property. As Ron Legrand would put it, “You can’t beat a dead (equity) horse and bring it back to life.” There’s no equity in this deal. If banks in your state are doing short sales then you can look at that route but if you’ve never done one before you might want to start with one that has more equity. Forget wholesaleing, you have to buy it for no more than what you can get hard money for (e.g. 70% of FMV) minus repairs minus your finder fee. Don’t fall in love with a house just because it’s pretty. There’s a lot more properties out there if you look. Good luck.
Short sale would be the only way and with all the liens you are looking at a lot of work. Not enough profit in it for all the work you would have to do. Move on.