Deal Or No Deal? - Posted by Tazz

Posted by ken on November 16, 2006 at 19:35:28:

If he will not tel you what he owes he is probably not motivated enough yet.What you really need is what he will accept.If he expects you to make an offer it needs to start out low enough that you feel embarrased to offer so little and since you are new it should probably even be lower than that.As a guide take full sales price you will sell it for after repairs multiply by .65 minus repairs and that is the most you should be paying

Deal Or No Deal? - Posted by Tazz

Posted by Tazz on November 16, 2006 at 17:31:45:

I am a relatively new investor (extremely well read and studied in creative real estate)working on my first wholesale deal.

Using the farming method,I’ve spotted several vacant properties and have found most of the owners. One of these vacant houses-a 3BR 2BATH w/CENTRAL H&A-in a decent working class neighborhood will sell for $77k in the open market after needed repairs. The owner discussed all the details with me,but is reluctant to tell me the balance on the existing mortgage-only that he has almost no equity in the property. He wants to hear back from me,though,regarding an offer.

Do I have a potential deal or should I just move on? Should I go ahead and make an offer based on the $77k? In other words,I don’t know how to base my offer since I don’t know his mortgage balance. I’m thinking 40-50% of the open market value. He sounds like he just might accept,then “make up any shortage with another one of his houses”,whatever that meant. Where do I go from here so I can proceed to advertize for a seller and flip the property?

This owner has (I think)three other properties he wants to talk with me about-all three in need of repairs,one with some equity.

Also,could someone e-mail me an ‘Assignment of Contract(or similar type)Form’? I’m sure I could adjust it for this state(GA). I would be most appreciative.

Re: Deal Or No Deal? - Posted by IB (NJ)

Posted by IB (NJ) on November 17, 2006 at 08:01:58:

I agree with ken on the offer and the formula you should use.

Don’t make assumptions about the seller’s motivation. Sometimes it doesn’t seem like its there until you sell your offer. With that said, at least find out if the mortgage is delinquent. If so, you may be able to do a short sale. Let the seller know that you and your partners (us) have extensive knowledge and experience in successfully getting lenders to discount the amount owed, thus allowing him to make a few more dollars. Get him signed up and come back here for help in negotiating the short sale.

Ib