Exit strategy ideas for a subject to deal - Posted by Jim IL
Posted by Jim IL on February 25, 2001 at 20:52:41:
I had another seller try to “Give” me their home today.
Here is the deal,
Home is in excellent shape, needs nothing.
FMV= ~$187k-190k (according to comps)
Payments: $1900/month PITI
Int rate on loan: 9%
New loan, only six months old.
Arrears: almost 2 payments, (~$3700) soon to be 3 (as of 03-01-2001)
Sellers will deed me the home.
I know that market rent on this is right at about the monthly payment on this home.
The market in this price range has been slow here lately, and this is my concern.
I know I will in all likelyhood have to hold this and cover this upcoming payment, plus the current arrears.
I obviously want to get a buyer who can cover the arrears, advertising and some cash in my pocket.
There is not a ton of equity here.
This is in one of our nicer areas, a smaller town real close to the larger ones.
The home is only 4 years old.
I generally offer L/O for all the homes I buy, but I was just trying to get some ideas from others to expand my horizons.
Plus, I know that in this price range even, getting at least $12k-$15k in option money seems difficult.
I just did a home somewhat like this one with a L/O, and felt that my profit was too low.
I was finding buyers who either had ALL I wanted upfront, but could not afford the monthly payments, (don’t want a negative cash flow, and the upfront was not large enough to compensate), or, able to afford the monthly payments, but only having like $5k in upfront money.
Which of course will not work here.
So, throw them at me here folks!
Ideas for an exit strategy on this one?
I will finish due diligence tomorrow, but assuming all is clear, then I want to record the deed and get to selling this puppy.
For the “maximum profit” of course.
Thanks in advance for any ideas,