Low offer on note of condemned house
I located a property that has a note for 140K. The note holder, an out of state financial company is eager to sell. The house was condemned by the city. The judge has given until March 28 to begin repairs or the house will be bulldozed. The homeowner is out of state and has not done any repairs or improvements.
Is there a "normal" discount for a loan of this type? What would you suggest I offer? I understand that after purchasing the note I would have to foreclose on the property. Thanks for your help.
UPDATE
I have spoken to the rep from the city and he said to keep him informed of my progress. He said it will not be a problem to get an extension from the judge as long as we can show we are moving in the right direction. I spoke to another investor this morning that went through the same process a few months ago. His property was past the demo date and he was able to extend it with no trouble from the local city officials.
The property will need major rehabing. Estimates from my contractor are 50-70K, depending on the grade of finish we decide to go with. The home should be worth 200K ARV, based on Comps in the area. I am very familiar with the properties in the area.
I submitted an offer to purchase the note this afternoon. They said I would hear back within three days. We will see.
Any of you with experience in this type of transaction? Thanks!