Good evening everyone, I am new to this site and this is my first post. I was hoping for some input on a transaction I am working on and don’t really know what would be the most lucrative approach.
Here are the basics:
2 bd/1ba, 1000 sq ft. (approx.), 1 acre land, corner lot sfr.
Appraised 3 years ago for $94K
selling price $93k with 10% nrd firm
payments $750
The owner is willing to finance but is very firm on 10% deposit, is it possible for me to make any profit on this deal if I LO or am I better off trying to Sub-to?? Or should I just run for the hills ;D
Oh yeah there’s one more thing, the seller will only finance for 2 years then he wants the balance. And I just moved here so I don’t have a buyers list or anything like that.
Any ideas where to go from here, I am meeting him this evening so any help would be greatly appreciated.
It could be a super deal if the house has gone up in value 25% per year for the last 3 years. My bet is that it has been almost flat making it a retail deal. Why buy at retail and 10% down.
Here is what I would want to see before I advise you to do the deal. At least 10K in net equity for you which means a sales price to a buyer of at least $108K to take into account your closing costs. Even this is a low figure. I would want to be able to get $1000 in LO payments from the buyer. Check comps, is this even possible. Maybe give up $100 a month in equity but get a cash flow profit. The most important of the above would be a buyer ready willing and able to jump right in the deal as soon as you close to avoid the risk of spending $750 a month.
thanks for the info…well here’s an update. i went to meet with the gentlemen last night and look at the house, it’s a nice looking place but not very functional at all. the possibility of making any profit on this property is there. however, i honestly believe that it would be hard to sell quickly because of the way the house was built. for example to get to the bathroom you have to go through the living room then the kitchen then past the master bedroom…what if you had to go real bad you’d never make it on time
on a more sirous note though, when i initally spoke to the seller he seemed very anxious to sell and he told me that he had tenants in the property that just moved out and the place was freshly painted, new carpet and floors and all that good stuff.
well all that was infact untrue as i found out when i went to see the property, there is alot of structural damage as well, so i don’t believe that his “appraisal” was correct and if it was, the property has significantly depreciated since then. which leads me to think if the seller was not forthcoming about the damage, condition and value of the house is this someone i want to do business with??
if i’m honest with him and he doesn’t reciprocate, is he trying to snatch my lunch money right under my nose…hmmm? ???
Thanks for the advice everyone. I did infact decide to turn down the deal. In this industry we have a hard enough time being taken as honest professionals due to a very small number of “investors” who take advantage of people, we don’t need to be on the other side of the coin toss either. Honesty is the best policy…in my book anyway that way everyone gets what they want and are happy in the end.
