I have the following opportunity (owner will let me Sub2 immediately) but have never had a sweat-equity deal in lieu of a down before. Owner lives in CA and his TX tenants trashed the house and he can’t carry both notes:
Here’s the situation:
ARV: $ 145k (but I’m thinking could be $135 in 60 days)
Current Loan: $104k
Paint In & Out: $3600
Door/Wall Repairs: $500
Misc (various small things): $500
Total Repairs Needed: $8200
When you do a sweat-equity down…here’s my question. I don’t want to let the person in the home without a guarantee they’ll fix it up. Do you charge the Down then return it to them? How have others structured this transaction?
Also, do you think I’m being too conservative on this? I just don’t like Sub2ing houses in this market without a 15% - 20% margin.
Thanks for your thoughts