Hello all, I have a dilemma. I spoke with a motivated seller recently about purchasing their home. She inherited it 10 years ago, took out a second mortgage and a heloc. she cant make the payments due to her husbands health and cant work. time is up on the heloc with a 16k balance due now (cant be extended due to delinquent taxes), 34k balance on the 2nd motgage, 5k owed on 3 years back taxes. She wants 60k to clear her debt and put a few grand in her pocket. they also want to stay in the home and rent it back for 6 years until she retires. the house needs a bath and kitchen remodel but that could wait until they leave. The central a/c unit is the next thing that needs to be replaced (25 years old) arv is around 115-120k. rent 850-900. one part says to try and make it happen and help these folks with their problem one part says back off..can a sub 2 arrangement be worked out with this? thanks for reading this far..I know its long
It is natural to want to help someone in that situation, but the reality is if they couldn't or didn't pay those bills, they won't or can't pay your rent either. Get the title situation checked out. Might be more they're not telling or don't know.
What is the selling price? If just 60, get a HMK and offer them a little more to get out and make it a clean sale. If that's just the cash down , then you need to provide more info.
Your rent is low vs ARV, so unless you can be all-in after rehab at 80 or so, you will have a hard time making much money.
Whatever you do, I would not recommend to buy it from them and leave them in there.
(I meant HML not HMK)
Thanks for the advice Doug, they basicly want 60k for the house..Her debt cleared and some cash in her pocket...I had thought about them not paying the rent.. there are a lot of unknowns at this point...
I don't mean to sound cold, but you are not the International Red Cross. There are a lot of people with a lot of problems and some of them can't be fixed. If you try, you will go broke. However, with that said, always make a detailed analysis of any home you can make a deal because one of them will be a home run. But make sure the numbers work as mistakes can be unforgiving.
Hi Bill, I know where you are coming from, I have never been a person to jump in recklessly...it has to make sense...
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