potential deals with little or no equity

I have put out about 25 signs and receive about 10 calls per week. Many of the leads come from people with little or no equity in their homes. For example, I got a call from a lady today:

  • owes about $120
  • ARV of house is $145
  • $15k in repairs needed

She is nearing foreclosure and would like to sell and get an apartment.

What can I do with deals like this?

Thanks in advance for your help.


If it is ARV 145, minus 120 owed, minus 15 K in repairs, that would leave 10K for profit after everything else. Doesnt sound like a great deal to me. I wouldnt touch it.


always keep in mind of holding Costs of three to four months or longer regarding repairs ,closing costs usually 2-3% regarding purchase price, and dont forget there will always be unexpected costs.

I would not touch the deal regarding the one your refering too.


SAVANNAH :slight_smile:

I totally agree that I should not touch this deal in the traditional way. I was just wondering if there are any creative investing techniques that can be used when you have a motivated seller with very little equity.

Why not ask the lender what they would take for an all cash offer? If they would take $90k then wouldn’t it be a good deal? Some will, some won’t but ya gotta ASK!

This prospect has not been foreclosed on yet, so why would I go to the lender first? Please advise.

If your signs haven’t worked yet, keep at it. The longer you fish, the bigger the catch.

This could be a potential good deal if you work it correctly.First, my question to you is the $120,000 a 1st mortgage or is it combined with a 2nd or 3rd mortgage>>>>The reason why I ask is you may be able to do whats called a Short Sale>>>>If not then you want to go directly to the lender and try to negotiate purchasing the property at a discount rate somewhere around $90K would be a fair offer >>>and if they bite then that would net you around $45K>>>starting to sound like a better deal now >>>just make sure you do your Due Diligence and don’t get to attached to the outcome >>>there’s other deals out there waiting.

I think this can be an OK deal also. I don’t know the exact situation other than “nearing” foreclosure. How far behind in payments? Whats the interest on the loan thats due?, Whats the market like where you are?

If she’s 6 payments behind or so and she has a low interest loan, you can bring her current, take her deed, sell to handyman/contractor(let them make the repairs) and make some cash getting a deposit greater than your investment and some holding costs by owner financing it to them, or lease/Optioning it to them,etc.

I wouldn’t say this is a lost deal until you do the due diligence needed to find the solution. People make money on low equity/no equity deals all the time.


Get a real estate license and list and sell the property for the owner and collect your commission. ;D Or even better, reffer the person to a buddy of yours who is a realtor for a quick sale, and have him buy you a dinner, or something… :wink:

On this deal since it is in foreclosure, wouldn’t you have to go to the seller and get a purchase contract at the $90k and have them sign a release of info so the bank would be open to talking/dealing with you?