Posted by Darin in CA on February 22, 2001 at 12:00:16:
I don’t mean to burst your bubble but you made a mistake. I don’t see where you can make any money. I think what your forgeting is the cost to sell the property. That will wipe out your profit.
With that being said let’s solve the problem: negotiating down the HOA is a tough sell but you should try. If I were you I would try to find someone like yourself to give you the $500 back. Your other option is to sell to a person with bad credit. They would be more than happy to take it over if you find the right person.
My advise GET OUT…I don’t know where in California you are but, I can help you with much better investments.
What is the best option to complete this deal? - Posted by Gary (CA)
Posted by Gary (CA) on February 22, 2001 at 10:44:06:
Here’s the real deal:
Seller deeded me condo in land trust for $500. After repair value between $115-120k. However the liens are:
$104k 1st TD
$3k 1st TD arrearage
$3k HOA dues (in arrears)
Other costs will be:
$3k repairs
$3k in closing, title ins., misc. fees. (in sale to new buyer)
$2k holding costs
Total: $118k ==> Little or no profit
HOA arrearage was a surprise (learned it from preliminary search) since seller told me it was only $500 in arrears. Gave seller $500 to walk before I did prelim check. I figured $500 was low risk to get them to sign before I did my due diligence.
Questions:
Will a HOA discount or waive arrearage if I would buy and pay right away? Their motivation is that the 1st TD will foreclose and wipe out past due amount. Have HOAs been known to do this?
Since it has been deeded to me, can I cut my losses and rent to someone on a month to month with renter’s understanding that it will be sold in three months? That is, just collect rent for a few months and let 1st TD foreclose with sale in 4 months. I don’t feel as bad about curing seller’s foreclosure since seller has already been verbally dishonest about HOA arrearage and did not live up to some of the terms of our purchase contract.
What are my options?
a. Sell as fixer and see what happens?
b. Attempt to discount HOA to allow profit room?
c. Do nothing & count my blessings that it’s only $500?
d. Rent it out and run with the money?
e. Fix it, discount it and L/O for $120k?
f. Fix it, discount it and sell No Qualifier for $120k?
g. Anything I miss?
Re: What is the best option to complete this deal? - Posted by CurtNY
Posted by CurtNY on February 22, 2001 at 12:23:48:
Gary,
We don’t have all the specifics but I definately wouldn’t shell out too much more money at this point. I might run an ad (owner financing or rent to own), if I could find someone that could afford the place and had at least $6,000 to play with I would contact the HOA immediately. I would also call the lender, explain the situation (make it sound real sad, the seller took your money and ran), they don’t have a good LTV position and may be willing to work with you. Get your $500 back from the buyer and add a few thousand to sales price. I don’t know what the payments are, what the rental market is etc… but if the numbers work why not give it a shot (just don’t put any more money into the deal - other than the ad) Good Luck!