Deal gone sour - Posted by Mike

Posted by Sean on July 08, 2003 at 11:39:09:

Sure, take the house Sub 2, put a tenant buyer in it for 100k-105k with 3% down. Should not have trouble getting what equates to another $50-$75 a month (the extra 10k over what you think the house is worth ammortorized over 30 years) from a buyer who needs help getting into a house.

Deal gone sour - Posted by Mike

Posted by Mike on July 08, 2003 at 10:57:20:

My first deal has gone sour. A motivated seller fell into my lap. A nice 3 bed 2 bath house that has comps of 93k, and the seller just wants to get out of paying for the house. So I thought I could take it Sub2 (land trust) and flip it to a more experienced investor. Come to find out that the loan balance is 92,500 which leaves no room for an investor to profit. Looking for suggestions on what to do? Is there anyway to profit from this deal?

PITI :677
Rental Rates: 735


Re: Deal gone sour - Posted by B.L.Renfrow

Posted by B.L.Renfrow on July 09, 2003 at 02:02:39:

It’s not clear from your post whether you’ve actually taken title to the property from the previous owner, or whether you’re simply asking if this is a deal.

If you’ve taken title, you’re going to have to live with it and make the best of a bad decision. The advice below to walk away is inappropriate if you’ve already purchased the property and told the seller you’d solve their problem.

If you haven’t agreed to purchase yet, then I’d look for a better deal. If you HAVE taken title, then you’re going to need to find a way to make this profitable. It’s unlikely you’re going to be able to flip it to another investor, as there just isn’t any excess fat on the table here. But you might be able to mark up the price a bit – especially if you’re in an appreciating area – and offer a lease option or a land contract. Either one of those should allow you to charge a bit above market rents also.

Remember to keep in mind for the future that just because a seller may be willing to give you his house doesn’t make it a good deal.

Brian (NY)

Re: Walk away - Posted by Alex F. (CA)

Posted by Alex F. (CA) on July 08, 2003 at 16:30:16:

No equity in the deal to even think about it…I would walk away. Your deal hasn’t gone sour because there was no deal to begin with.

Alex F. (CA)