Possible First Investment

5 Replies

I'm very knew to the REI world. As in, I started really considering it yesterday, but I quite possibly could have my first deal. My predicament is whether I'm jumping in too soon, or should I go for it because of how good the opportunity is. My dad plans to move from Mandeville, LA to Lake Charles, LA. He wants to sell his house which is about 70% renovated. He has three liens on the property. One is the mortgage two are judgments. Therefore, he wants to just sell the house for what's left in the mortgage and let the other two judgments follow him. He also wants a new vehicle out of the deal. Here are the numbers on the property: Mortgage: $95,000 Vehicle: $20,000-$30,000 Home size: 2800 sq ft Avg comps: $110/sq ft Reno Cost: $40,000-$75,000 ARV: 65% LTV: 65% Profit Potential: $80,000-$110,000 The comps and reno cost have been verified via home builders and real estate agents who have walked through the house. This opportunity seems way too good to pass up, but I'm worried I don't have enough knowledge to pull it off. I'll leave it to the community to give me their thoughts.

@Jordan Cardwell I'm struggling with the "need a new $30k car out of the deal" with multiple judgements on the property. What you should be asking yourself is... how would you treat this as a deal if you didn't know the owner?

In most states judgements attach to the real property owned by the individual receiving the judgement and must be paid off for clean title,  you need to make sure your getting clean title out of this deal.  Talk to a title agent and pay for a title search and title insurance when you close the deal, obviously guy has creditors chasing no telling what else is out there.

Cameron Skinner if that's the case then it definitely wouldn't be a worthwhile investment. I will definitely need to check the civil code pertaining to judgment liens. Regardless though, if the property was free and clear after the sell should I do it or wait? Jon Huber obviously if I didn't know the person this would be different. I do know my dad though, and I know his reasons for wanting a new car, and I know all the liens on his property because I have to help him wade through all of it during tax time, and any time he gets something in the mail. I'm trying to make a decision based off the facts that I have in front of me not a hypothetical situation based on whether I know the person or not.

@Jordan Cardwell My only advice is to be weary. There is a reason people advise on not mixing family with business. It is very easy to play with the numbers, over estimate, and/or sacrifice potential earnings for those we care about. But sometimes these can add up to taking a loss... that may set you back. 

Well it doesn't matter either way. I reviewed the state civil code, and the liens would stay on the property. Due to the amount of the liens there's no investment potential. Thanks for the responses.

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