Strategy Needs Critique

[Kevin Craig]

I've had some experience with doing lease options in teh past. I put 5 properties under contract but could not collect an option fee. That proved difficult so I have another idea.

I want to get a 100,000 line of credit. Find a property valued at 200,000, selling at 150-170. Put 20k down, finance the rest hard money or with a mortgage broker.

Put a renter in it. Put back on the market immediatley and sell for 190. make 20-40 k profit. What do you guys think.. Will work, any unforseen problems.

Seriously thinking of looking for a line of credit. Thinking this is best when the market is in an upswing but what if I could get shortsales or foreclosures right now priced steeply below??

Thanks for all responses

[Chris G.]

Originally posted by J Scott:

Originally posted by Kevin Craig:

Put a renter in it. Put back on the market immediatley and sell for 190. make 20-40 k profit. What do you guys think.. Will work, any unforseen problems.

What makes you think you can sell a property with a renter in it for $190K, when the market value is $200K?

First, it's very difficult for most properties in that price-range to cash flow, so you'll have a hard time finding investor buyers, and second, most serious investors know how to find their own deals at less than 95% of market value.

My thoughts exactly...

Also, unless you have some relationships, you will probably find it hard to get a straight $200k line of credit.