Going to view a high-end unfinished rehab tomorrow. Seller is a burned out rehabber who is about to run out of money. Seller is open to selling subject-to, which is how I intend to lock it up.
Any points I need to keep in mind when wholesaling a high end fixer-upper sub-to?
your wholesaling it point to take put your 5 to 10 K in the price
And get it off to your buyer
As well tell them about how the contract is you set up as in it is sub 2
Simple nothing to hard here
How much spread is in it? Does the seller want any money? Are you going to finish the rehab? Herbster
Herbster, how are ya.
There’s about a $250K spread in the deal as-is and the rehab is about 80% completed. The ARV is about $875k and they want about $625 for it (flexible & motivated, so that number will be going down). I know, not great numbers but that’s why I figured why not get it under contract sub-to, so I can market it as such. No risk on my part except my token deposit to the seller. Sub-to is definitely the angle with this deal. Told them I likely can’t get them anything down, just debt relief. Told them they’ll get their equity when the end buyer finishes the rehab job, markets it for sale, finds a qualified buyer who loves it, and sells it, and that could take from a few months to over a year. I definitely told them the cold facts.
All a rehabber would have to do is step into their shoes and take over the payments and finish the job. It would require much less money from the buyer; all they’d need is enough to cover the holding costs and finish the rehab. And of course my upfront assignment fee. They won’t need to go literally borrow a million bucks to do this deal.
Seems like a simple enough arrangement as 001 said, just checking with you super-vets to make sure I’m not missing anything since this isn’t a standard all-cash wholesale. One thing I’ll definitely do if I go forward with this is order an appraisal subject to the repairs. Potential buyers would probably want to see that when dealing with these types of numbers.
Another thing, after seeing the house today it is NOT a luxury home, but is a VERY appealing smaller home in a very highly desireable area.