what would you do?

General Real Estate Investing
1

Received a call tonight from a realtor friend of mine. 1 of his deals went down the tubes when the buyers of a property never showed up at the closing. The sellers have moved out of the house , they have also rented a place (short term) until their house is built. The sellers have a mortgage on the “sold” house, and 1 on the land they bought, and are now paying rent. They need the money from the sale but not right away - within 120 days. Rent on the house would be about 550/mth, taxes/insurance - 2200/year. Could prob squeek 85,000 out of house.

The original deal was this that the buyers didn’t show up for

    Sale Price                 80,000
    Closing costs             5,000 (100% seller paid)
    Realtor Commission   5,600
    Deposit from buyer       500
    Payment to Seller     68,900

The house appears to need no repairs, roof 3 years old, vinyl siding 5 years old. interior condition good, 2 story-no bathroom on main floor.

After speaking w/realtor, not much room for movement maybe 5,000 the seller would eat to make the problem go away, but may be able to get terms for 120 dayas. House was on market 5 mths before till closing. Cash is not a problem for me, but don’t expect to get a good discount for using it either. It’s kinda a retail situation.

What would you do w/this if anything?

2

Howdy IWINUWIN:

Not a deal unless you want a place to live. As a rental unit it is negative cash flow from day one. Looks like the best cash price you can get is $75,000 and then resell for $80,000 so you can get your cash back hopefully.

One possibility. Buy and sell on a note for $85,000 and carry the paper for maybe a $800 per month income on the cash. If I had the cash getting all dusty and nothing else to do why not do it.

Without the Realtors fees and the closing costs it may be an OK deal.

Look for something better. If you want rentals you can use the $75,000 to buy 20 or 30 units.

LOL Hope this helps