Posted by Joe Kaiser on July 14, 2007 at 01:11:20:
YOU list it.
You’ve just put it under contract and are looking for someone to flip it
to. List it in the MLS. That’s where buyers look for your kind of
property.
Why doesn’t the seller just list it himself?
Why did he agree to sell it to you in the first place?
Who knows?
He did, so you list it and put that seller’s number to the test. He’s
agreed in advance that it’s a number that will allow you to make a
profit, and now it’s time to find out.
Structuring a deal when the owner owes more than what he is selling it for.
So far this is the information that I know:
The seller purchased this house from a divorcing friend to help them out for $240K I think a year ago. They can’t sell it. Some how the mortgage is linked into their own home mortgage and they can’t let this house go into forclosure or their own house will also go into foreclosure. They are now just trying to get rid of the house. They know they are going to take a hit and are going to refinance the lose into their own mortgage.
House is in good shape with some landscaping issues and is in need of a privacy fence. They are going to lower the price to almost $200K. I figure I can go in and low ball it, but is there anyway for me not to have to goto the bank for a loan? A subject to I don’t think would work because they owe too much.
What do you guys think? Any suggestions would be appreciated.
Nancy,
You’re not answering the most important question. What is the FMV of the home today? You need accurate, recent comps of sold houses. Only then can you decide what if anything you can do.
Be very careful that you don’t make the same mistake and make someone elses problem your problem.
Lyal
The FMV of the house is $235K. It does need some landscaping (to fix the drain in the front yard to make it blend in more and a fence in the back yard because it backs up to 4 different neighbors.
Re: Structuring a deal when the owner owes more - Posted by Joe Kaiser
Posted by Joe Kaiser on July 13, 2007 at 09:28:50:
Would you really want to be on the hook for nearly $200k, with the
hope of getting $10k ahead, in equity?
Buying real estate comes with all kinds of risks and that’s why you
must require real and significant profits with every contract you sign as
buyer.
Realistically, your chance of profiting here is far less than your chance
of losing, at least at these numbers.
Ask the seller if it’s okay for you to make a profit. Ask them to agree
that doing so is required before a sale can happen. And when they
agree, tie it up, list it, and see what the market says it’s worth.
At that point you can sell, adjust the price, or walk away.
Ask the seller if it’s okay for you to make a profit. Ask them to agree
that doing so is required before a sale can happen. And when they agree, tie it up, list it, and see what the market says it’s worth.
Quick question for you Joe- I follow the reasoning of your statements but I got lost with the “list it” portion. Who exactly lists it? The seller, who has the choice of listing it on their own, or the investor who tied it up?
Thanks