HELP!!! Is this a deal or a flop??

10 Replies

Hello BP family, 

I ran into a situation that may be a deal, but I'm not sure. I need your opinion on what my options are? 

Subject: 4br /2ba  townhome in Lauderdale Lakes Fl. The estimated market value is $120,000, minor repairs need.

Owner: She owes $90,000 on the mortgage, she rents it out for $1600 and has a cash flow of $445. 

Situation: The owner is going through personal issues and no longer wants the property.   She said  she would get rid of the property for $10,000-$15,000.  She needs that money to move out of state and start over again. 

Question and/or advice:  Is this a wholesaling, buy and hold or flipping opportunity or is this a flop? Thank you in advance.    

I have townhouses that do not have an HOA fee, but most do. What about this one?

My first impulse is if you can get it for $100k and rent it for $1600, then it seems like a good deal on the surface. Obviously, you need to do an in depth analysis to really have a better idea. 

Do you have the $10-15K? That would be the first step. As far as subject-to negations there are whole courses, books, and podcasts here you'd have to read and or take. They are not the easiest deals to get done and/or wholesale.

At first glance, it looks like it could be a deal. I like a gross rent multiplier (GRM) of 8 or less. That means that a $100k unit should gross about $1000 / month. From a cash flow perspective, it looks like it could be a good income property. I'm a little unclear on the details of the transaction. Are you buying it for $105k and assuming the loan? Or, will you be paying more than that to cover transaction costs?

@Jeff Morelock ,  I do not have $15,000, but if the deal was good, I would find it. Like you said, I've been reading about subject to and learning a lot. I also found out that her name is on the deed, but not on the mortgage. There is a lot of moving parts and I need to know what I'm doing. 

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