help with possible sub2 deal

General Real Estate Investing
1

Hi all;
I am just getting started in sub2. A seller contacted me with a possible deal, although I don’t think there is enough there. Any advice would be appreciated.
Seller owes 117K, realtor (it is not listed yet) told her it is worth around 130K or so; per my research, maybe 135-140. Selling on a LO I could get slightly more of course. She is a little behind to the tune of 3K or so. Minimal work needed to get it ready and it is vacant. Payment is $1050 (PITI) with a low rate (4.5% or so). Good area with good schools, rent could fetch 1100-1300. Doesn’t seem to be quite enough equity. I don’t think she is in a situation to pay part of the mortgage or pay me anything to take it over; although I may ask.
Any thoughts or advice would be appreciated!!

Eric

2

Based on your numbers looks to be enough equity to make a sizeable profit.

If you buy it for what she owes you’re only in it for $117, but you can turn around and sell it for $140K on a LO, maybe with $3-5K upfront for an option fee. That’s $23K in equity. Even when you factor in some closing help etc you’ll clear some decent cash.

3

I think the main hang up you would have would be the cost of any repairs. I also think that in this tightening market that that would be a pretty good deal.