Pay for CO to make $40k?

[Dave McEvoy]

I have a motivated seller willing to sell for $200k renovated, he ran out of money to get CO. Could retail for $249k. I was looking to wholetail it. CO is about $3-4k. Is there anyway to buy this property without having to front the funds for the CO? He wants cash but I did mention owner financing or buying sub 2, but he seems intent on cash.

[Eric James]

The seller can't come up with $3000-$4000 for a CO in order to make $49,000?  Smells kind of fishy to me.  Maybe there's a problem getting the CO.

[Dave McEvoy]

no it's kind of a long story he ran out of money and needs about three to four thousand to get the CO and I was trying to find a way to do it without having to front the money myself so I can sell to a retail buyer

[Jason D.]

What is the seller saying needs to be completed for the CO? Does the seller have permits for all work completed? Do comps support a $249k ARV?

[Jake K.]

Originally posted by @Dave McEvoy:
I have a motivated seller willing to sell for $200k renovated, he ran out of money to get CO. Could retail for $249k. I was looking to wholetail it. CO is about $3-4k. Is there anyway to buy this property without having to front the funds for the CO? He wants cash but I did mention owner financing or buying sub 2, but he seems intent on cash.

What is a CO ?

[Dave McEvoy]

Something with the flooring, but he said the building inspector told him to just get an electrician and engineer to sign off to get the CO. I of course will confirm this, I'm working on getting comps now but seems pretty accurate. I was thinking sub 2 for $160k (mortgage balance) , create a note for $40k for when I resell maybe w owner financing. just trying to come up with a way to do this, make $40k or so, without having to front the money for the CO.

[Andrew Johnson]

I’m with Eric James in that something is “off”. Here’s why, if it was just $3K-$4K you could probably get a cash-advance from a credit card. You’ll pay through the nose in interest but the owner could hopefully wrap it up in 30 days, put it on the market for $249K, sell it, and be well ahead of the game.

The only way that this looks like it would make sense is if it were a true “sale”. I want to list for $250K, I’m going to pay 6% in realtor fees, have holding costs, closing costs, etc. So it’s say I “bet” $225K. Subtract the $5K (just going higher than the $4K “ask”) and you get $220K. Would you forgo the $20K to get out of it today? Have a true cash transaction? Have it out of my life in 2 weeks? Sure, that makes sense to me. You de-risk holding costs, CO costs, etc.

Consequently, this deal either “makes sense” for the seller or is “fishy” depending on (ironically) your deal terms.

[Dave McEvoy]

I was going to buy and sell using an option contract, exercise my option when I find a buyer and do a double close. I would sell Fsbo

[Account Closed]

Originally posted by @Jake K.:

Originally posted by @Dave McEvoy:
I have a motivated seller willing to sell for $200k renovated, he ran out of money to get CO. Could retail for $249k. I was looking to wholetail it. CO is about $3-4k. Is there anyway to buy this property without having to front the funds for the CO? He wants cash but I did mention owner financing or buying sub 2, but he seems intent on cash.

What is a CO ?

 Jake I'm assuming it's the certificate of occupancy. My area calls it a U&O. Regardless it's typically the seller's burden to supply and cash out of pocket.

[Dave McEvoy]

Yes it is the seller's typically, but he is out of money to do so now. I don't want to front the money to do so, just looking to see if there were a way to structure a contract to put the burden on the end buyer.

[Don Konipol]

@Dave McEvoy, If you're not willing to provide the money to get the occupancy permit, exactly what is it that you bring to the table?  Why would the property owner need you.  Seems like you are interested in capturing the profit on someone else's work with no investment, risk, or expertise.  Sorry, the business world doesn't work that way.  

[Dean Williams]

You or him can first list the property with a Realtor ( I can list it for you) once you get a buyer under contract, you can then either place a contingency on the deal with the new buyer...or use Transactional Funding. 

If your going to wholesale it, get the property under contract with the seller!! Then use transactional funding + double close in order to receive the profit you want to make. 

[Marilyn Mike]

Hi @Jake K.I see you asked what is CO? CO is Certificate of Occupancy that local agency gives to say building is in compliance with codes and suitable for occupying.