Which strategy fits best?

Question

Hi guys,

Im looking at drawing up a deal and would like to hear your opinions on what strategy you feel would fit this scenario best..  Thanks.

-Asking price is $399K

-Appraised value $380K-$400K

-Balance owed $100K

Brian Gibbons · Answer

What is the existing financing,type, pmt, ?

REI is cash or terms, low cash, or great terms.

Brent Coombs · Answer

@Andrey Yashchenko, oh, you want the Seller to carry the Note AND be given no down payment? What is your plan for the property? To live there and keep paying their Mortgage AND whatever (minimal?) extra to the Seller per month that you can negotiate?

On the surface of it, offering close to market value is not often referred to as a "deal" on BP. And if you are going to be out of pocket each month roughly the same amount as if you DID take out a mortgage, then I am not sure of the actual benefit you are getting by trying to be creative? And how will you EVER build up a relationship with a proper Lender?

Unless I missed your point altogether. Cheers...

Andrey Yashchenko · Answer

Brent,

You got the first part right.

The seller wants to get a full appraisal value which is approximately 400K. They also owe 100K on their note.

I would not mind paying close to full asking price. But i would like to do it zero out of pocket and off the mortgage grid..

Brent Coombs · Answer

@Andrey Yashchenko, aah, I think I know what you mean now. You mean that currently, the SELLER has about $300k equity; whereas I had been thinking you were referring to YOUR potential equity.

Is this the conversation you are hoping to hear: "yes, I know my home is worth $300k more than I owe, but I would like to sell it to you for the loan value only, because I don't want any money left over"?

I think @Curt Davis was being too optimistic to list even a "slim" chance...

Andrey Yashchenko · Answer

Brent,

Please elaborate on the relation of appraised value to the built equity in the property.

Thank you

Brent Coombs · Answer

@Andrey Yashchenko, what Appraiser leaves $300k equity unaccounted for?

And how much will it cost YOU to get an appraisal for that EXTRA $300k?

Andrey Yashchenko · Answer

Curt,

The seller wants to cash out as it is an estate sale. If the property appraises close to the asking price there would potentially be 300K in equity.

My idea would be to hold it for some time then improve and sell it.

Curt Davis · Answer

Find out what the seller is looking for or wants.  If they owe $100k, the chances of them taking that is slim to not happening.

What are your intentions with the property? Wholesaling, fix and flip?