DEAL or NO DEAL, that is the big question!!

4 Replies

DEAL OR NO DEAL?

Newbie wholesaler here with potential first deal. Family member (motivated seller) willing to accept earnest money hold on property.

DETAILS...
SFH: 3/4bd, 1.5b
S.F.: 1,724
MLS: 275k
FMV: 252k
OWE: 240k
Condition: Poor and trashed with roofing, electrical, foundational/structural issues due tree growing thru livable space and mold issues brewing.  Property complete rehab, period!!
REHAB: 150k
ARV: 350/400k


Was ready to do an earnest money deposit but the kicker is, she already submitted short sale docs to bank two weeks ago..which is understandable. Found out about the short sale submission last evening. I really was hoping for a wholesale, as I cannot afford to do a Subject To current 2k mortgage payment. How to handle?? Deal still or No Deal?

@Ishy Bee No deal. An investor wants to buy at 70% of ARV. Using your highest amount of $4000000*.7=$280000less repair cost of $150000=$130000 less holding cost of $10000 estimated = $120000. So you would need to purchase it for less than an investor would.

Okay. I see.  Thanks sooo much Tim!! I kind of figured that out.  The house is probable worth about 80k...if that much.  But what about the short sale submission part?  

The owners are upside down as it is. Don't waste you time on a subject 2 deal or creative financing. If they can't or won't sell near $150-120K like mentioned before, you won't find a buyer. 

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

We hate spam just as much as you

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here