You left out some key info like current value (as-is). They owe roughly $358,000 with arrears. Also what would a house like that rent for in the area? If there is no equity and no cash flow from the property then it is best to pass. You my be able to buy sub2 and then sell with owner financing but the spread would be a bit thinner than I like since the underlying loan is at 6%. You could however owner finance it at 9% and make the spread but is it worth coming out of pocket $33k to reinstate.
You left out some key info like current value (as-is). They owe roughly $358,000 with arrears. Also what would a house like that rent for in the area? If there is no equity and no cash flow from the property then it is best to pass. You my be able to buy sub2 and then sell with owner financing but the spread would be a bit thinner than I like since the underlying loan is at 6%. You could however owner finance it at 9% and make the spread but is it worth coming out of pocket $33k to reinstate.
Currently have a Sub 2 Deal in Burford, GA 30 mins from Atlanta. Unfortunately deal does not have any equity or cash flowing.
Direct to seller.
Purchase price 325,000
PITI 2,251.00
(Monthly payment Breakdown)
Principal and interest 1717.13
Taxes 191.87
Insurance 144.17
MIP 198.48
HOA 230.00
7-10 year Balloon
Interest rate 5.99
Reinstatement amount 33,093
It will cost you the arrears and closing costs and money for the seller to move, so If you can cash flow at $1,000 a month, it will take a" mere" 3 years to break even. Plus the headaches. (Usually houses with that much arrears have deferred maintenace)
Currently have a Sub 2 Deal in Burford, GA 30 mins from Atlanta. Unfortunately deal does not have any equity or cash flowing.
Direct to seller.
Purchase price 325,000
PITI 2,251.00
(Monthly payment Breakdown)
Principal and interest 1717.13
Taxes 191.87
Insurance 144.17
MIP 198.48
HOA 230.00
7-10 year Balloon
Interest rate 5.99
Reinstatement amount 33,093
Is this inside the city of Buford and Buford City Schools? What year build? What's the remaining loan balance (maybe we can get the PP down). I know Buford is a desired area and it could work as a short term flip depending on the ARV and rehab needed. I'm interested.
You left out some key info like current value (as-is). They owe roughly $358,000 with arrears. Also what would a house like that rent for in the area? If there is no equity and no cash flow from the property then it is best to pass. You my be able to buy sub2 and then sell with owner financing but the spread would be a bit thinner than I like since the underlying loan is at 6%. You could however owner finance it at 9% and make the spread but is it worth coming out of pocket $33k to reinstate.
If there's no way to cashflow and the interest rate isn't great it seems you need to either renegotiate some of the terms or find a buyer that just wants a house to live in and doesn't care about cashflow (AKA not an investor). Let us know how it goes!