Got a lead, now what?

Question

Got a call from attorney friend, (she does family law), says she has clients who need to sell, guessing due to divorce. Gave me the address and said they are looking just to "break even". A little research shows they paid $151,326 in 2007 in a desirable neighborhood, and school district people want. House was new when bought. She didn't give phone number but I could find it if I needed to. She also said they were listing with someone. The home today is valued at around $175,000. No repairs needed. My question is, being that there is little equity in the home, should this be pursued? What do you think "break even" means? If you do pursue it, What strategies would you use? My guess they owe somewhere in the neighborhood of $135000 but won't know until I talk with them. All advice is appreciated.  If you think it's something to look at, let me know, I wouldn't mind partnering and learning.

Brian Gibbons · Answer

Low equity sub2 or lease option assignment, right on.

Show them the costs to sell with an agent.

Mark Gilbo · Answer

Better hurry and contact them.  If that realtor signs them up, deals over.  Realtors are great deal killers and since MLS inventory is very low in most places, they'll sell that house pretty quick if priced right.

Send a letter next day red so they have to read it.  Maybe you can subject to or lease option it from them for a little cash in their pocket.  Numbers arent right for a wholesale deal if it was in my area but yours might be different.   Good luck.

Steve Babiak · Answer

For most people, "break even" means to get out whatever they have already put in, not just getting somebody to cover the loan balance.  So "break even" is usually at least loan balance plus down payment ...

Rachel H. · Answer

It's best to get more information on it and possibly set up a time to see it. Before going in, just be sure to have your figures and know the market values in the area as well as having a detailed exit strategy. Hope that helps!