have a guy who submitted me his information, and looking at the numbers it appears to be a good deal. I was thinking that a short sale or subject to would work. However, the property is out of state. I am new to real estate, in fact I am still working on my first short sale. I don’t know if it would be better for me to pass on this deal, considering I haven’t brought propery in another state before, or try to partner with someone in the state and do the deal.
Need serious advice. here are the numbers
asking price 115k
2005 estimated value 159k
1st mortgage balance 52k
2nd mortage balance 27k
payments $ 570.00 a month
the guy is 5 months behind in payments and states the house need plumbing and electrical work
It appears that there is too much equity for a lender to consider a short sale, although, you never know until you ask.
Is the property in good condition?
I would not put too much emphasis on a 2005 value. In 2005, real estate in most markets peaked and is selling for less today. You need current market value to make an informed business decision.
What is your plan for the property if you buy it?
If the seller is 5 months behind, will he let you take over the mortgages and give you the deed? If the seller demands any cash for his equity, how much are you prepared to pay?
I suggest that you see it befor you buy. Just because it was worth 159K in 2005 doesn’t guarantee that it hasn’t been used as a meth lab since then. Or maybe had a roof leak and is now caked solid with mold.
Have you figured out how you are going to manage repairs from far away?
If you can, do some investigating to see whether or not the comps justify the asking price. Ask the seller how he came up with that number. Are there any local REI clubs in the area where you are buying? I would try and network with some local investors that may be able to shed some light on who you may contact for repairs and such since you do not know the area.