Purchasing a pre-forclosed property from a motivated seller
I am meeting with a motivated seller tomorrow evening who has missed "one or two mortgage payments" but is not yet technically in foreclosure. He owes 30K on the note and wants me to purchase the home from him for somewhere between 60K and 70K. I believe it's ARV is ~$80K. The property is located in my wholesaling "sweet spot" (No intention of any rehab due to the location.) I am inclined to offer him $35K for the following reasons:
1) If I have to wholesale it, I have been advised to offer an amount less than 50% of ARV (which means I must offer less than $40K)
2) My intention is to make a $5K wholesaling fee (which takes it down to my intended offer price, which also leaves him with $5K after his loan is paid off.
Is this a good strategy? Do I have to worry about anything if it is on the verge of foreclosure? Any comments regarding purchase and exit strategy would be HIGHLY APPRECIATED as this is my very first (potential) deal. Thanks!