You say that homes in the seller area or going for $500-600K. What EXACTLY will THIS home sell for (what’s it’s ARV)?
Do you have $25K and can you make the current monthly payments?
What do you plan on doing with the prop if you do get it?
What is the current market conditions of your area (and particularly the area that this prop is in)…up, down, flat?
There are a number of ways to pursue this deal depending on what you can, or can’t, do and your intentions with the property after getting it.
Assuming (big assumption, btw) that $500K is a fairly accurate resale value, then at $335K, you’re already below 70%, which is great. Now, as long as the repairs don’t cost $100K, you’re on your way.
As far as negotiating, you could explain that if the seller doesn’t find a way to get rid of this property soon, then they’ll end up with not only no money, but totally ruined credit, too. You can fix late payments. It’s very tough getting back on track with a foreclosure on your reports.
That may work, but truth be told, if your numbers are even close, then another investor is going to swoop in and grab this one FAST, even paying the $25K to the seller.
Here’s why. Say you’re in a stable market. ARV is $550K and the home doesn’t need much, if any, real work. Buy it (number of ways HOW), put it on the market for $500K. A decent RE agent will have it under contract FAST. Allowing $60K for costs, you’ll still gross $80K.