What I meant was that, based upon my local ratios, I don’t believe it will work.
Appraisers will try to justify the value you need if possible. In my area, actual house sales have been at 91% to 96% of realistic listing prices for decades. The $21K was based on your numbers. I looked at your deal to sell at ~ $120,000. That’s a negative $14,000 on top of $15,000 in back payments. VA will probably not agree to a short sale. It isn’t the way that they do things. You’d be starting out with $29,000 + closing costs in the hole; all but $14K in cash. Most likely, there will be negative cash flow as well if rents aren?t 1% of FMV, or more. You will need a few years of appreciation, never guaranteed, to break even.
If the current owner wants to avoid foreclosure, my suggestion was to have him subsidize your purchase for a period of time as your condition to bail him out. $300.00 a month reducing by $75.00 annually for four years might be a talking point.
IM-sometimes-HO, you would be better served by using your $15,000 for CRE education, marketing and advertising expenses, and buying cash flows or property at a significant discount, in that order.
I am looking at a pre-foreclosure in which the the mortgage exceeds the appraised value of the property by $6K. the principle bal. of the loan is $134k, the appraised value is $128k, the owner is in arrears $15k, It is a VA loan. I am a newbie just starting out and this is the first call I’ve recieved since beginning my marketing campaign a few weeks ago. What am I looking at here?? Is it worth pursueing?? Is there anyway to do a deal in this situation??
Thank you for responding, your advice is much appreciated however I remain clueless as to it’s meaning (LOL). I am a newbie, most of what have I learned has come from this site. I began a Letter and flyer campaign a few weeks back and got a response rather quickly. I’ve researched and gather information from the owner, public records etc. and now I am stuck. Could you detail how this 21k buy-in would work?
Thank you for responding, your advice is much appreciated however I remain clueless as to it’s meaning (LOL). I am a newbie, most of what have I learned has come from this site. I began a Letter and flyer campaign a few weeks back and got a response rather quickly. I’ve researched and gather information from the owner, public records etc. and now I am stuck. Could you detail how this 21k buy-in would work?