A friend of the family’s is going through a divorce. Which is too bad.
But the Woman (A friend of my mother’s) is getting their house out of the settlement with the stipulations that she sell it in a reasonable time frame and give a % of the profits to her ex husband.
She has told me that it will be ready to sell within a few months Probably this summer. But she wants to sell it without a realtor to save money. She knows I am in REI and asked what I could do to help.
Why I think it might be lucrative: The house is completely paid off with the exception of a small home equity loan (I think less than $5k). I do not know the what the house is worth yet. I will probably just get it comped out.
Location: It is located in a semi-small town of about 15000 people that is 45 minutes away from 3 different major metro area’s in each direction. It is in Hastings, MI.
How should I approach this deal?
Are you in a position to buy it yourself?
Unfortunately its tough for investors to help people sell their houses when the seller is not in a desperate enough position to drastically reduce the selling price. Are you licensed it sell real estate at all? That might open up a few doors…like I said, its tough-I tried to help a lady last summer in the exact same position as you described but was unsucessful because she wouldn’t reduce the price enough to make it attractive for other investors to buy. Non-REI folks think selling at 95% of value is a big drop, whereas investors are usually looking to buy at no more more than 70%. I recommend people try realtors in this housing market if their just trying to do a regular retail sale. Keep us updated!
Jordon ask her if she would be willing to do a lease option or land contract. Then find a buyer and assign it to them for your fee. Herbster
This is kind of the route I was considering doing. Doing a sandwich Lease Option and assigning it to a tenant buyer. I have the course from www.naked-investor.com and am looking to get into doing lease options. I live in Grand Rapids.
I just saw this come up and thought maybe something could be worked out since there is such a huge amount of equity. If I find it’s value to be 100k and can get a L/O at 97k with 750/month payments and find a tenant/buyer for 105k with 800/month payments. Profit?
I will definitely keep in touch with you as this progress’s and i’ll see what she wants to do.
I just saw this come up and thought maybe something could be worked out since there is such a huge amount of equity. If I find it's value to be 100k and can get a L/O at 97k with 750/month payments and find a tenant/buyer for 105k with 800/month payments. Profit?
No, it’s a BIG LOSER! Here how the numbers would look in the real world:
Gross rent: $800
Operating Expenses: $400
NOI: $400
Your payment : $750
Monthly LOSS $350 (OUCH)!
Do a search (at the top of the page) for 50% Rule.
Beyond all that, if this person is really a FRIEND of the family, then I wouldn’t get her involved in sandwich lease option scheme. If she’s really a friend, then she needs to sell the property at retail so that she can get the money to pay her ex.
Good Luck,
Mike
I don’t know if you get into Hastings much, but from the PM I can tell you this. The side of town she is on isn’t as flooded with foreclosures as south of the river, but there are some. Including a couple over by/in the Taffee Addition, which is one of the more desirable parts of town. These are going to be the initial competition, and in reality she (or you) are probably going to have to be priced accordingly and/or offer some seller financing. The problem there is going to be if the divorcees are going to be able to come to some sort of agreement on how to split the money. Example, house sold on land contract w/ say 10%-15% down. One gets the down payment and calls it good. And the other collects the payments for the life of the term and the balloon. Of course this is all stuff that they would probably need to clear through their attorneys or mediator.