Brand new to Real estate investing
HELP!!! 😳😳🤯
So... I'm sticking my toes into real estate. I really don't have a background in real estate as of yet but I've been interested in it for a while. So what I've done so far is I started a motivated sellers group on Fakebook. That was just an easy thing to do that didn't cost anything while I educate myself. Well, someone contacted me with a home they want to sell. Here are the details and I am looking for some ideas on how I can help them solve their problem.
A Couple bought the house for $160,000 in 1999.
They have a second mortgage it for a total of $227,000 combined first and second mortgage.
They tried to sell last year for $275,000 (they started out at $297,000) with a realtor. And it didn't sell.
I've had some comps done and the lowest came in at $240,000 & The highest at $285,000 to $300k range.
The home is a 3 bedroom 3 full bath home in a decent affluent neighborhood.
They have preinspected the home with no issues.
The house is turn key ( I haven't seen it yet) I have a meeting with the homeowners on Thursday this week to discuss options and to figure out a way for them to live out their vision.
They are retired and are wanting to move to Goodyear Arizona. The house is the hang up.
The house is in a floodplain. And they said that was the problem last year with potential buyers along with a realtor that wasn't as helpful as the homeowners wanted. They really don't want to list with an agent if they can help it. They just have a bad taste in their mouth from a negative experience. I can elaborate on that if someone needs more info.
The home appraisal came in at $250,000 but then was knocked down to $235,000 because of the floodplain situation. The home has never had water issues since they've owned it, and we've had some major storms in that area since that time (5+" rain storms). Homes nearby are selling quite a bit higher than that see above #'s.
They have a transferable flood insurance policy for $1,200/yr.
The minimum they would be willing to walk away from the home is $235,000 out the door. Or roughly 8 grand in their pocket to cover moving expenses to Arizona.
The home tax assessment is at $212,000.
I brought up possibly doing a lease option where they lease out the home with enough money down to cover their moving expenses and incidentals on the property and they said that was exciting and had never thought of that before and wanted to discuss it further. Hence the meeting on Thursday.
Full disclosure I have NO IDEA what I'm doing!! 🤯🤯😳😳 They even asked me how I was going to make money helping them and I said " I have no idea, the margin is so tight I doubt this is a money making opportunity for me, however i think the education will be very valuable. "
They in turn said that if they came out of this ahead they would for sure be generous with me. I have known this couple for 20 years and would love to help them start living their vision in Arizona.
So if the group has any ideas of how i could help them get out from under their property I would be very thankful.
Has anyone ever worked with a floodplain situation?
Could I turn that into a positive? Like hey!! You could get into a great property for a better price because of this? (I like turning negatives into positives)
Subject to? (I literally don't know what that is really)
Lease option? (I don't know much about that either) bigger pockets episodes lol.
I would love to hear your feedback and if you know someone I could talk to, to walk me through some of these things I'd be incredibly grateful.
Sorry for the super long post, but that's what I got going and I didn't want to waste anyone's time by not putting out all the info I had.
One last thing, what is the best REI group in the Milwaukee area? I would love to connect with some people I could help and that could help me get started. Thanks.
Be Blessed, Jonathan