I have a deal where I can get the property for $60K. They owe $57K, and just want to get out of it, and said $60K would cover their expenses or whatever they need the $3K for. Anyways, the property was appraised for $76K. It has renters in the upstairs and downstairs, and they have been there for 7 and 10 years. One pays $460, the other pays $480. So there is $940 in rent coming in on this property each month. Originally I was thinking of wholesaling it until I found out that it had this much rental income. If I wholesale it, I’m not sure how much I could get, but probably under $10K profit. I’m thinking of purchasing and holding and getting $16K back at closing. I would have some closing costs as well if I’m going to hold it though. There will probably be repairs needed in the future. Again, I’m trying to build capital, but this would allow me to walk away from closing with cash because of the equity, but I’d own the property as well. Does anyone like this plan? Any other suggestions?
Bill
I should be able to get 100% financing at 7.5% for the first, and 12.5% for the second. Worse case scenario, I’ll get 95%.
What’s the best move for this deal? Have them quit claim the property to me and refi? Purchase the property for $76K and have them cut me a check for $16K at the closing? What’s the best approach? Anyone with experience in deals doing this?
I have had a couple experienced investors tell me I should just try and wholesale this. I can find cashflow deals like this all day, but I’m being advised to build capital first. Thoughts?
Im in a deal similar to this, closing is on Oct. 7th…in Cape Coral, FL…the seller and I agreed on $360k for the sales price, but the home appraised over $400k so I asked the seller if we could raise the sales price to $380k and I would get back $20k to cover my closing costs and then I can walk away with about $12k cash in pocket. She agreed, so we had to make an addendum to the purchase and sale…BUT if you finance this property you better not submit the purchase and sale with that addendum attached to your lender. If it is an investment property, your lender will usually only allow up to 2% in a seller’s concession at closing and you must show that it will be used for closing costs and/or fees. If it is a primary residence loan, you can get up to 6% and the same rules apply…so this deal will have to be separate from the purchase and sale AND the seller must be willing to agree to this. At that price I would just wholesale the property…think about the percentage of return on that small investment, if you could get close to $10k profit I would go for that just to avoid any problems getting back that extra cash from the seller at closing. Thats just IMO.