What’s the Best Strategy for …? - Posted by Marbs
Posted by Marbs on November 17, 2000 at 13:20:25:
Experienced investors, please help me out on this one. What’s the best strategy for this situation? (I’m meeting the sellers on Sunday.)
- Sellers recently inherited house with no mortgage or other liens. Free and clear. (I’ve checked.)
- Both husband and wife (sellers) have pressing health problems, and have stated that they “want to get this house sold” and be done with it.
- House is in very good condition and comps at $82,000 (in a decent, but not great, neighborhood).
- So far, sellers have dragged their feet on doing anything to sell the place; I got their phone number from an acquaintance who knows I buy and sell properties. Doesn’t seem that there are any other potential buyers in the picture. My contact also told me that the seller/wife stated to him that they would accept $70K to sell.
Given their state of mind, I think they’d accept $60K-$65K for a fast closing, maybe less for all cash. My initial thought is to get it under contract and flip it at just under retail – say, $78K (through a double-closing).
I want to make sure I do this deal right, so I’m asking for input from the experienced investors. I have bad credit (divorce) and can’t put up my own $$, so that limits my options. My objective is to generate cash … and fast. Are there better ways to structure this deal? Other methods that come to mind include the following (let’s assume my purchase price is $65K):
- borrowing private $$ and offering a good interest rate, payable in lump sum after 12 months (and 1st mortgage position) … or splitting the profits upon resale;
- doing a lease-option and sub-leasing it out for positive cash flow, with the idea of marketing it for resale;
- obtaining owner financing for $25K (and a 2nd mortgage position), with low payments for the first 12 months and an adjustment thereafter, together with a $45K first mortgage to a different lender, and then renting it out for positive cash flow until I find a buyer (within 12 months, so I could cash out).
Experts, please help me out with this one. Thanks!