Hi guys, i'm having a hard time understanding the concept of wholesaling a pre-forclosure property that has equity or I just have the whole concept confused.
For example I currently have a house thats in pre-forclosure right now and the seller is motivated, but hes asking for 400,000. I'm not sure if this is a good deal or if i'm even doing the process right.
Estimated value of the house: $576,636
Mortgage balance: $294,348
Estimated equity: $282,288
Amount of default: $8,243
I've just speculated repairs to be around 50k right now
closing costs: $43,887
carry costs: $29,258
investor profit: $97,526
MAO says i need to be at 246,960. How would equity in the property help me in this scenario (or if its even a good deal?) bc the loan amount that he owes is 294,348 + the default amount of 8,243?
Can anyone give me more insight on how positive equity in a house should help us (wholesalers) in scenarios for pre forclosures and to see if this is a good deal? because I think i got this whole misconception of equity in a pre forclosure house. Thanks