possible deal… - Posted by Michigan Andy
Posted by Michigan Andy on February 20, 2002 at 10:48:41:
Got a possible deal here. SFR, 2/1 basement, detached 2-car. Sellers are nephew & wife of elderly gentleman. They had an appraisal done, and it sucked out loud. no photos, comps, anything. Anyhow, appraiser says value is $62k-67k. The place, up until a few months back, was occupied by the old uncle (93yo). Definitely needs some attention, like gut the kitchen & bath, and update electrical. I figure, loosely, $15k in fixups. I had a realtor friend pull comps, and I believe house could easily sell for $110k. It is vacant, obviously, and the gentleman needs the cash for the living facility where he resides ($1900/mo). The nephew tells me he has enough cash to get him through 2 more months.
Here’s what I was thinking: I would like to buy this house for my brother (livin w/me & wife currently). Since I do not have that kind of cash, I use a hard money lender who will go 65% LTV. Give lender a first mortgage for $65k, and ask seller to hold a short second for $20k, purchase offer of $60k. Both notes for 90 days. Use $25k proceeds for house fix-up & my brother’s credit cleanup. He gets a nice,
clean, beautiful house for about $30k under after-fix-up appraisal (minus my small profit, of course, after all, there will be some exposure here - business is business).
Someone tell me where my thinking is flawed.