I have a homeowner that emailed from one of my ads, and said he owes
811,000 on the property, but just had it appraised for 845,000. How would I structure this deal. Should go ahead and send him an "Authorization to Release Form"? He's in another state. How would I go about working this deal.
Come on Short Sale Experts' I know you are out there. Please give me
some advice for a newb!!!!!
Huntsville · Member since 2008 · 137 posts · 3 votes
19y
I am no expert, but it does not look like you are going to make much of this deal. I am assuming he will only get paid for what is owed on the property, and then if you wholesale it, even to make money, who is going to buy for that price? Unless it needs repairs and will have a ARV of much higher.
OK, I am a NEW-B as well and this is puzzeling to me. The guy says he owes 811,000 on the house. Now lets assume he is going to let her have if for what he owes which is 811,000. The house recently appraised for $845,000. This is $34,000 difference we are talking about.
Can you give me figures and examples of why this would not be worth it, and you would just pass it up.
I can understand you will pass it up by reading this thread, but as NEW-B I would like to know why for future references.
This is not a deal. Look at it in terms of % not 35k. You always want to be buying @70% of market value, which includes repairs. An appraisal doesn't mean much, especialy considering the state of the national real estate market and lending crisis. You have no room for a profit. This deal would be a horrible first deal.
So this is what I come up with. Let me know if I am wrong please.
70% of 845,000 = 591,500 . correct?
I suppose with the 70% factors in all the mishaps, and fees to sell the house etc? I have read Ron LeGrands books and he uses 70% as well...just not real sure why...
Also, is it safe to say that someone could sell their house for 70% below MV? If they owe 70% less than MV then why would they choose to just give their house away versus going through a realtor to sale it?
I am not trying to sound snotty and be rude at all. I just have a lot of questions. I am the type person that needs to know why this and that happens. I cant be told Just because. I hope you understand and thank you for your response and help.
Rental Property Investor · Lisbon, CT · Member since 2008 · 120 posts · 29 votes
18y
I know this post is old but...
Generally the person who would sell for 70% less would be an owner in distress... they haven't made it to the listing agent yet because a creative investor has found them first.
They might have some type of hardship or may need quick cash. These people aren't the same as the sellers who are waiting for agents to get their house sold and have the time to wait.
Can you shine some light on how an investor can start negoiating with the bank to purchase a house from a owner in distress at current market value ? Is a realtor needed?