Got a call on a property, ARV > 650K, no/little work needed, asking 570K. Seller is to move into a new house by the end of Oct. My thought:
1.Don’t think the seller is willing to go as low as 70% (the seller doesn’t sould very desperate) so this is not a wholesale deal.
2. Because of it’s high mortgage payment, it’s not a good lease-option.
3. I could only think of Option as the only way to proceed with this property.
Could any experts here share some knowledge/experiences in handling expensive houses? How should I smoothly talk the seller into Option the house to me? Are there any other ways to structure the deal? ???
This is a near-retail asking price (88%)…unless the price comes down significantly, it’s not really a deal…
By your own admission:
(1) The seller is not very motivaed
(2) The high ratio makes it a non-candidate for lease-option
By my calcultations, you’d have to get $4,500 or so in rent (I’m thinking this is a non-starter!)
If he optioned it to you, what would you do with it? There’s no real room in the deal to speak of…I suppose that you could put a few bucks into and hope to get full retail and maybe make a few thousand but if the gamble doesn’t work and it sits, the holding costs will eat you up in a "jiffy’…
My two cents.
Thank you Keith. I agree with you. Maybe I should wait till the seller becomes more motivated.
As the closing day for his other property nears and it dawns on him that he’s fixin’ (I’m trying to learn the local language!) to have two mortgages, his motivations will change…let him know now what you’re willing to offer and tell him to call you if and when he thinks that might work for him.
LOL…$570,000 is just enough for a 2 br condo here in san diego…lol
please excuse…just feeling sorry for myself
For $570K, I can buy between 6 and 10 houses outright, do cash-out refis, get most of the $570K out, and cashflow with all of them!
Sorry to rub it Dave!
Where you at Keith…North Dakota?
Northwest Louisiana (the relatively dry part of the state!)