Investor · Baltimore, MD · Member since 2013 · 7 posts · 0 votes
Hi
first and foremost, I just want to say that I am new to the real estate investing business, but would appreciate any help anyone could give.
I recently began a yellow letter campaign last week, sending out 100 letters last Friday. Monday at 5:57 pm I I get a call.... I was not expecting it to happen that fast! but it felt great. The lady I spoke with told me a little about her property. How much she owed and when she bought the property. I had asked her why she was selling, but it turns out she still lives in the property and wants to continue living there but wants someone to buy the property because she is behind on the mortgage.
At the fear of sounding like a stupid question to most, can I make this into a deal and into profit? From the vague description, does this have potential to be a deal? If so, what kind of deal could I make of this? Wholesale flip to a buy and hold investor?
sorry for the long windedness but I'm very excited to have such a quick response.
Investor · Nashville, TN · Member since 2015 · 688 posts · 607 votes
11y
Yes you can make money here. You need to determine what the ARV is. Is she upside down? Is there equity? If there is enough, you can flip it to another investor. You can buy it for yourself. If there isn't that much equity you can buy it subject 2 the existing mortgage staying in place. If she's upside down you can sub 2 or short sale it. There's a lot you can do but there's other questions you have to answer before you figure out an exit strategy
Investor · Nashville, TN · Member since 2015 · 688 posts · 607 votes
11y
Yes you can make money here. You need to determine what the ARV is. Is she upside down? Is there equity? If there is enough, you can flip it to another investor. You can buy it for yourself. If there isn't that much equity you can buy it subject 2 the existing mortgage staying in place. If she's upside down you can sub 2 or short sale it. There's a lot you can do but there's other questions you have to answer before you figure out an exit strategy
Investor · Saint Paul, MN · Member since 2014 · 47 posts · 14 votes
11y
If she is behind on her mortgage what makes you think she will pay rent? There is potentially money to be made there. Will need to get more info to see the value
Again, she gave very little detail over the phone but was for sure motivated to sell. I wasn't expecting to find a seller-finance deal on my first call, so i've been doing most of my research for absentee owners.
Investor · San Antonio, TX · Member since 2015 · 30 posts · 11 votes
11y
Hello @Nicholas Renshaw, first of all, congratulations on taking action. Many who are part of BP never get past reading posts. Way to go!
There are a few things you will need to find out, by asking your seller:
1. "What would you like to have happen?" You already got the answer to that question, which was that she wants to sell the house, and remain living there.
2. How far behind on the mortgage are you?
3. What is your monthly payment? Does that include taxes & insurance (PITI), or is that principal & interest only (PI)?
4. If we could put a deal together so that we buy your house, and allow you to remain living in the house, would you consider keeping your existing financing in place, with us taking over the payments?
There could be a considerable amount of equity in this deal. IF the market value remained at $549K, you're looking at a $175K spread. 2006 was the year before the "bubble burst"; check the MLS to determine the comparable sales for the property. If you don't have MLS access, find an investor-friendly realtor, and ask them to pull comps for you.
If the seller is willing to sell you her house subject-to the existing financing remaining in place, get a copy of her current mortgage statement. You will need to know the details of the loan, and the amount the loan is delinquent (has she received a notice of default, or letters from an attorney?) The amount of arrears will help you to determine whether or not it is worthwhile to buy this property, since the loan will need to be brought current when you buy the house.
Not to mention, IF the seller wants to live in the house after you purchase it, how much is she willing to pay each month to live there?
Ask lots of questions as you work your way through this deal. Get good advice (do you work with an attorney in your area? If not, start looking for one!). Don't give up!!
Investor · Baltimore, MD · Member since 2013 · 7 posts · 0 votes
11y
@DavidMarkette and @DevanMcclish thank you! Hours of scouring through the net couldn't have given me better information. looks like I've got some work to do. I will post back with an update on how it goes.