new to RE investing and new to the forum!
homeowner emailed me she will sell her house for what she owes $81,724 she says it’s worth $125K
im hunting for L/O opportunities, i havent done any deals and i dont know what to do with this lead
AL :huh
new to RE investing and new to the forum!
homeowner emailed me she will sell her house for what she owes $81,724 she says it’s worth $125K
im hunting for L/O opportunities, i havent done any deals and i dont know what to do with this lead
AL :huh
I see three options:
#1: Flip the property. Put an offer on the property, subject to bank financing. Purchase the property, make any needed repairs and resell the property for some quick cash.
#2: Wholesale the property. Put an offer on the property, find another buyer and do a double close with an agreeable title company. You close with seller and then immediately close afterward with the next buyer.
#3: Get a birddog fee for referring the deal to another investor.
THX for the detailed answer John
gonna do a call back tomorrow :biggrin
That is pretty wreckless advice johnevanmiller. Alstarr, before you do anything you need to find out if it is a deal or just a woman in trouble. You don’t want her trouble to be transferred to become your trouble. The first thing you need to do is find out how much the house is worth so that you know that there is money in the deal. You need to find out if the mortgage that she is offering you is the only encumbrance on the house. She may have a second loan that took all the equity out of the house.
You need to know what every other house just like that house has sold for in the last 6 month. That is the value of the house. It doesn’t matter what improvements she has made or how despirate she is.
THX Blue
there’s def more to this than i anticipated. i’ll have to do a title search then to learn the whole story? Al
Additionally, you need to get an accurate rehab number on the house. If you’re inexperienced, you’ll need a contractor to go through it with you. If the numbers still pan out, then you can probably wholesale it to an investor for 70% of the After-Rehab Value, Minus rehab expenses. Subtract from that your wholesale fee of $5-7K, and that is the max you will be able to pay. If she’ll take even less, great. You can then assign your contract to your end-investor for a $5-7K assignment fee.
If your investor is a rehabber, they will prefer that you use an assignment versus a double closing, as the assignment represents one less transaction. Some lenders, particularly FHA, will refuse to do loans if a property has been transferred more than once recently, or will make the loan process much more difficult (conventional lenders don’t like flippers making profits). So the rehabber’s end buyer will have an easier time with their financing if you use an assignment. An assignment is also much less expensive for you, avoiding transactional funding expenses and additional closing costs.
So true BlueMoon.
Many times a seller will “forget” to tell you the real problems. It has happened to me before, not getting the title checked before closing will either make or break you at times. Just make sure that the seller is upfront about everything as you are with them.
Alstar,
Any updates on that deal?
I believe this is the most effective step that you should be taking, for now.
Good luck!