Would you do the deal? Foreclosure Rescue 🧐

Question

Foreclosure Rescue

• Mortgage: $385,000 [valued at 475-520]
• Seller walk-away: $10,000
• Wholesaler/Chris: $5,000 at close + $3,000 upfront consulting
• Rehab: $8,500 total ($3k upfront, $5.5k at close)
• Realtor commission: 6%
• Closing/title: 2%
• Monthly carrying costs: $3,000

🔑 Takeaways

• With 2 months hold, you’re fine at $475k+ (profit $13.5k–$55k).
• With 4 months hold, $475k is basically a wash; you need $485k+ to net five figures.
• With 6 months hold, you’re losing money below ~$490k. Only a $520k sale keeps it comfortably profitable.
• So your break-even zone is around $480k–$485k if it drags out.

✅ Bottom line: This deal works if:

• You can keep days-on-market short (≤60 days), or
• You can confidently list/sell at the high end ($495k–$510k+).

If it sits too long and sells toward the low end ($470s), you risk burning cash or barely breaking even.

Chris Seveney · Answer

you are correct, you are taking on someones problem to make it your own. Let it go to foreclosure and pick it up in the low 3's in foreclosure sale

Daniel Tanasa · Answer

Hello Jenifer,

I think this deal is too skinny. I wouldn't do it for that margin. Also, today's average days on market are around 60 days, then you have an additional 30 days to close if everything goes right. At 3 months holding you're already in the negative. So, it will be a no for me.

Also, I don't understand why a wholesaler is asking for money upfront. What is the transaction doesn't close because of title issues or something, you pay him for nothing. I wouldn't agree to pay anything before closing (other than HOA which sometimes you have to pay before the actual closing for the Statement of account) .

Good luck!

Corby Goade · Answer

Generally if there's a wholesaler AND 2 real estate agents involved, you are dealing with an MLS wholesale, which is pretty much always a losing proposition.

As an agent, I'm networked with many wholesalers and sometimes I bring those deals to my buyer clients, but if the property was on MLS and and wholesaler has it under contract and is trying to move it, no thank you.

And a consulting fee? That's a new one.

Chad U. · Answer

Why wouldn't the homeowner just sell it themselves instead of handing over and losing out another $10K+?

Jennifer Andrews · Answer

@David Randolph Hi David, this is a creative foreclosure rescue deal. We will NOT be buying the property only coming in paying mortgage and construction, listing & drilling cost. This prevents home owner from having the foreclosure on record and investor pockets initial investment and profit sale . In a perfect world 🤪 lol timing is everything in a crazy market. That's the risk!

Jennifer Andrews · Answer

@Chad U. Thank you for your message Chad!

That’s a fair question. In a perfect world, yes, they’d just list and sell. But in these distressed or foreclosure situations, the homeowner usually doesn’t have the time, money, or ability to go through the full sales process. They’re often behind on payments, utilities, or repairs and need a fast close to avoid losing everything. That’s where wholesalers or investors step in — they provide speed and certainty, even if it means the homeowner walks away with less than if they sold traditionally.

David Randolph · Answer

Jennifer, where do you get the monthly carrying costs of $3000? it looks like you're borrowing over $400,000 and at 10% interest and that's over $3400 a month alone and just interest charges and then on top of it you've got utilities, you got prorated real estate taxes and what about fire insurance, etc ?

Jonathan Taylor Smith · Answer

@Jennifer Andrews - Hmmm - Sounds stressful... I prefer situations with multiple paths to a profitable outcome. Those that are only profitable on a short timeline where everything goes perfectly scare me - as everything rarely goes perfectly. And if your best case upside is potentially as little as $13.5K - that seems like a LOT of risk for such a low benefit. Get seller and wholesaler down to $5K each. Get realtor commission down a percent or few. I assume the price needs to be what it is to make the foreclosure save work? If not, get that down. To be (more) certain of a quick sale, you must be able to list it below market value and still make a profit. So you need enough meat on the bone to make that work.

Jennifer Andrews · Answer

@Jonathan Taylor Smith Thank you for your response Jonathan!

I agree and you’re right, deals where everything has to go perfectly to barely make a profit are way too risky. I agree there needs to be more margin in it to account for the unknowns. I’m definitely going to push back on the seller and wholesaler, and I’ll look at whether there’s room to negotiate the realtor commission too. If I can’t create enough spread to safely list it under market and still come out ahead, then it’s probably not worth the time, stress, and risk.

Would you do the deal? Foreclosure Rescue 🧐

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