Hello I have a motivated seller who i am thinking about taking over his payments. The property doesn't have enough equity to wholesale because the cost of repairs is to much. He owes $70,000, the ARV is between $110,000 and $120,000 with about $30-35,000 in rehab cost. But the mortgage is only $700 with escrow a month and the property after rehab can be rented out between $900-1200 a month and even up to $1600 if rented out through section 8. I was thinking maybe I could do a subject to and then live in the property and slowly fix it up until it is in a good condition rent out.
I am new and this will be my first property. Do you guys think this will be a good idea or do you know of any type of funding i can get in order to rehab the place to rent it out without having to actually live in it for a few months to fix it up first?
Thanks in advance for your reply's :)
Welcome to BP, Dezara Beck. I would seriously think about whether or not this is the right property given the numbers. You're correct in that this wouldn't work for a typical wholesale deal, but if you're confident in being able to keep a good tenant in the property, a buy and hold could certainly work. Personally, I would want to have enough skin in the game (equity) so if I needed to unload it, I wouldn't suffer a loss; but that's just me. Finally, make sure you account for any periods of vacancy when you do the numbers so any loss of come doesn't come as a surprise. Wishing you the best in your new RE adventures!
Thank you Lawrence Robinson... I think wasn't a good property to invest in after all. The numbers were already bad and because of the area it will be hard for me to get from up under if need be.
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