Deal or no deal?

I have a property that I'm not really sure what to do with if anything. The spread is not very big so I'm trying to figure out if it is even a possibility. Basically the seller got divorced a couple of years ago but her and her husband still own the property. He is still living there and while she pays half of the mortgage. The have listed the property twice but it expired both times with only one offer. Now they just want to git rid of it.
It was listed at 245k, obviously more than it is worth.
I'm figuring by the comps it would sell at 225-230k.
They have a loan of 205k, wife will sell it for that, but husband is talking more in the 215+closing cost range (after all, he is living for half price).
The home needs no repairs.
So I want to find out from the experts if there is a way to make money on this. I was thinking maybe I would offer to take an option to buy because I don't know if I could resell it fast enough to assign, and also buyer would probably being using conventional financing.
Please let me know if you have any ideas.
Lance

Edited: 06/26/2010 at 04:41AM

Jon Holdman

Real Estate Investor · Wheat Ridge, Colorado

Moderator Pro

12,319 posts
15 awards
95 influence

Feb 12 '08, 12:10 AM

So, they want $205-220K and you could sell if for $225 to $230, right? Even if you could buy for 205 and sell for 230, its just a 10% spread. Your costs will be about 4% if there are no agents on your sales transaction. 7% if they buyer has an agent, 10% if you use a listing agent, too. Plus holding costs. There's no deal here.

Jon

Edited: 06/26/2010 at 04:41AM

Jon Holdman, Flying Phoenix LLC

Lance Huebner

· Woodbury, MN

13 posts
1 award
50 influence

Feb 12 '08, 12:33 AM

I appreciate the fast response. I see what your saying with the small spread and buying and selling costs.
What I was really wondering is if there is a way to get an option to buy and then assign the option just like I would a regular purchase and sale agreement. That way the seller and end buyer would pay the closing costs, and I would never actually purchase the property so there wouldn't be any holding costs. I've never done this before, are there any other costs associated with assigning a contract?
Even if this is not possible on this property, would this strategy possibly work on other properties with bigger spreads but don't need repairs. In other words, is there a way to wholesale a property to a reatail buyer if the prop doesn't need repairs.
Thanks again for your help, this forum is great.
Lance

Edited: 06/26/2010 at 04:41AM

Nick Rubino

Real Estate Investor · Fayetteville, NC

27 posts
1 award
50 influence

Feb 16 '08, 10:45 AM

the only way i would mess with it is if you got that sales price down. maybe explain to the wife that some money is better than none! Plus to re sell it, your going to have to get your numbers down to move it quickly. even at 205 there are too many " what if's" Don't try to force the nubmers. U might be able to pull like 5-10k out of it, but i wouldn't push it.

I just tried to force the numbers on a rehab that sat for 3 months longer than i thought it would, then it appraised like 5k short, so i might have broke even, but long story shot, i forced the numbers and it basically just wasted alot of my time

Edited: 06/26/2010 at 04:43AM