I have a deal for a House with a balance of $175,000 25 years remaining. The homes in area are currently selling for $85,000. The current debt service is $1,700 including HOA fees. I can get a rent of $1,500 for the house which is 3 bed 2 bath.
How can I make this deal work? I was thinking of approaching this through a subject to deal.
Wow so the value tanked that much over a 5 year period... insane. Are those comps?
I would probably be trying to scoop up some of the 85k ones and not waste my time on a property thats clearly underwater. You would get around the 2% rule instead of coming out of pocket every month.
Is there something I'm missing?
I don’t know how it could be any more obvious that this is probably the worst “deal” you could likely find......paying more than double what the house is worth And losing money every month. You really need to ask?
This was a new Townhome development that was built in Trenton. The homes are being sold at auction for about 30k to 50k due to people foreclosing. I was only trying to figure this out because I know the home owner.
@Gerald Boone Hello Gerald, it sounds like your property doesn’t seem to have enough cash flow when renting traditionally, have you thought about doing short term rentals? I’m not familiar with your area but you can research the airbnb market. Just something to think about before completely dismissing the deal.
Yeah @Gerald Boone there's nothing you can really do there. It's noble of you to try to help your friend out, but it's not going to work. The best thing to do is try to do a short sale just so your friend's credit doesn't get ruined from foreclosure. If he wants he can rent it out but he's still going to be losing $200/month.
Short sale if possible. I agree.
short sale best option
I believe I know which townhomes you are referring to. Are they the townhomes off of Centre street? If so I had looked into a similar property but ended up performing a short sale.
$85k for 5 year old condos that rent for $1500 a month? Why aren’t people scooping these up ?