Here's the numbers. What should I do? - Posted by Andrew-VA

Posted by Laure on June 16, 2000 at 08:20:31:

If you get rid of most of the Realtor’s fees, you can Lease/ Option this house out with 3-4,000 option money down from your buyers, and jack the price up another few bucks, higher than 69k… Options are for “future values” not today’s values. You can make a few bucks on this one.

Laure :slight_smile:

Here’s the numbers. What should I do? - Posted by Andrew-VA

Posted by Andrew-VA on June 14, 2000 at 16:08:50:

Two days ago I found a 3/2 SFR appraised for $69,500 back in February. The loan balance is $55,125.84 for 15 years @ 8.5% interest with monthly payments of $521. The seller is one payment behind, and owing taxes since 1996 totalling $2,271.64.
Realtor is willing to finance his $3000 commision as follows: $1000 now, $1000 in 1 year, $1000 in 2 years.

The bank and seller are willing for me to assume the loan if I bring her taxes current and pay the realtor. So here’s what it looks like.

My total investment would be:
$55,125.84 loan balance
$ 2,271.64 back taxes
$ 3,000.00 reator’s commision
$ 350.00 title exam
$ 200.00 recording fee
$ 75.00 document prep
$ 125.00 closing fee

=$61,087.48 total

My total out-of-pocket is:
$2,271.64 back taxes
$1,000.00 first payment to realtor
$ 690.00 closing costs

=$3,961.64 total

The house is in decent shape, but interior needs to be painted, siding needs to be washed, and carpets could be ok with a little shampoo.

Now what should I do with it and how? Rents are very low here. Market rent is $450. I’ve rented a similar house for $525. It would really be pushing it to get enough rent to even get a break-even cash flow. I need cash. Can I make any with this or should I walk? Could I sell it owner financing if the bank will not allow another assumption? I’m new and need some advice here.


Re: Here’s the numbers. What should I do? - Posted by Laure

Posted by Laure on June 16, 2000 at 08:08:33:

I’d offer to take it “subject to”. Have the seller come up with half the back taxes, and give the Realtor 500.00. Otherwise, why would you “save” the seller? There has got to be some guaranteed profit for YOU. The fact that the REaltor is willing to sign a note for his commission shows that he knows there is nothing going to happen with this house. If he gets 500.00, that is better than nothing. And he will get nothing for this house, because with the commission being so high, there is absolutely no deal here. IF it really only needed painted, I might play with this deal. But, I wouldn’t get the loan in my name… as a “subject to” ONLY.

Laure :wink:

Re: Here’s the numbers. What should I do? - Posted by Vic

Posted by Vic on June 15, 2000 at 13:15:56:


You say the Realtor’s commission is $3K. Does this mean the property is listed? If it’s not listed, then why are you paying the Realtor any commission at all?

As far as the deal is concerned though, this sounds like it could be good to flip. Buy it for $55k plus & try to flip it for as close to the $69 as you can. Advertise it with owner financing with you to sell the note at closing. See the articles on how to do this if you’re unsure.


Re: Here’s the numbers. What should I do? - Posted by John

Posted by John on June 15, 2000 at 24:07:10:

You say the house appraised for $69,500.00 what are the comps? If you did not have the realtors fee you could L/O the property possibly? The #'s are tight I would see if the owner could chalk up any money to help with the taxes and then you could take their burden off them.


Walk away. The numbers are way to tight. - Posted by Andrew Smith (Phila)

Posted by Andrew Smith (Phila) on June 14, 2000 at 18:22:55:

As a general rule you need to buy at no more than 70% of market value to have a large enough spread to make any money. Walk away from this one.