How to help potential seller who owes more than house is worth

How to help potential seller who owes more than house is worth

Member since 2020 · 11 posts · 3 votes

Hey all. I am new to investing. Had a conversation with a guy who has two mortgages totaling 77k (50 on the first, 27 on the second). The ARV is 69.5K in current market. Estimated repairs 12k. He says he is currently renting out the home pretty consistently. He says he just wants to sale for more than what he owes. I told him that I would look into other possible solutions but that he might be better off continuing to rent out the unit at this time. Thanks for any insight that you can offer.

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Investor · SC NC, VA · Member since 2020 · 1k+ posts · 756 votes
5y

You gave him the right advice.  Otherwise, he would just be cutting his losses.

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  • Investor · SC NC, VA · Member since 2020 · 1k+ posts · 756 votes
    5y

    You gave him the right advice.  Otherwise, he would just be cutting his losses.

  • Real Estate Agent · Nampa, ID · Member since 2017 · 439 posts · 361 votes
    5y

    Your best bet is to have him carry and do a wrap.  That being said, I would never pay more for a house than what it is worth. 

  • Member since 2020 · 11 posts · 3 votes
    5y
    Originally posted by @Sarah Brown:

    Your best bet is to have him carry and do a wrap.  That being said, I would never pay more for a house than what it is worth. 

     What is a wrap?

  • Rental Property Investor · Columbus, OH · Member since 2017 · 3k+ posts · 3k+ votes
    5y
    Originally posted by @Javonne Gray:

    Hey all. I am new to investing. Had a conversation with a guy who has two mortgages totaling 77k (50 on the first, 27 on the second). The ARV is 69.5K in current market. Estimated repairs 12k. He says he is currently renting out the home pretty consistently. He says he just wants to sale for more than what he owes. I told him that I would look into other possible solutions but that he might be better off continuing to rent out the unit at this time. Thanks for any insight that you can offer.

    Very tough to sell a 70K house for more then 70k. Id say let him pay down a bit more principal. 

  • Mindy JensenPro Member
    BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
    5y

    Not every property you find will make a good investment. Some properties would only work if they paid you to take them. This sounds like one of you has to lose money for it to work. 

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