IS this a good deal?

5 Replies

House on Mississippi Coast. Owned by man in Military. Transferred and needs to sell. Appraised at $572,000, needs $85,000 in repairs, asking $375,000 which is about $200,000 less than appraisal. Good neighborhood. Recent property sales in area are in this range. House built in 1929. In 1996 developer bought house completely modernized the house.

Current house notes are $4,500.

Then I get this information, "There is a lawsuit pending against the developer and real estate broker". I have asked for more info about this but just sent the email a few minutes ago.

In any event I cannot find an investor to even talk to about this. I am a newbie and don't know any.

Am trying to determine how to find a few. I really just want to do a deal with someone else taking this over. Pay me a finder's fee and i will be happy.

Any suggestions

Alice

Alice,

There could be no equity or the property could be in dispute for some time to come. It sounds like the suit is not against the owner so less likely the house will be tied up but still too hard to tell given the limited info provided.

You want to get in and out and make a quick buck. You are effectively dumping the legal questions in someone else's lap. Most investors want nothing to do with such things.

You will do better if you find an investor who has a legal background (retired or active lawyer comes to mind). Granted they will also know that if you want to collect a fee for being a birddog you are operating illegally as you are not a principal and you do not have a license (assumption based how you presented this idea).

Not every lead is really a deal. Some of the time there is a real issue that makes the lead unprofitable or less profitable than investors want. If you want to do a deal with this property you need more info and you need to be able to present info that lets an investor get comfortable. You are better off getting the deal under contract so you are a principal so you have something to sell rather than just operating as an illegal broker.

John Corey

I found out the lawsuit is between the developer, real estate broker and the present owner. It it will not have any effect on the sale of the property.

I intended to be the principal but did not want to get in too deep on my first deal.

My original thoughts was a smaller deal. A house worth a half million is not a small start.

Thanks,

Alice

Originally posted by "acrane":
I found out the lawsuit is between the developer, real estate broker and the present owner. It it will not have any effect on the sale of the property.Alice

Alice,

Are you really sure that the suit will not impact the sale? There will be no restrictions on the property and no lingering defects or concerns later?

Note that if the suit gets messy you do need to tell people later that the property was part of a suit unless you can confidently show that all problems have been corrected.

Mostly I am saying that you need your eyes wide open. It could be a great deal as the suit might scare off others.

John Corey

Well I have totally backed off the deal. But not strictly because of the lawsuit. It turns out HE is suing the Developer and RE Agent.

I assume he is suing because of the $50,000 in termite damage that he found on the second floor of the property a year after he purchased it.

The deal is just too big for me, it has problems I am not prepared to take on (estimate $85K in Repairs could turn into $160,000).

Appreciate all the support I have gotten from you guys.

Alice Crane

Originally posted by "acrane":
Well I have totally backed off the deal. But not strictly because of the lawsuit. It turns out HE is suing the Developer and RE Agent.

I assume he is suing because of the $50,000 in termite damage that he found on the second floor of the property a year after he purchased it.

The deal is just too big for me, it has problems I am not prepared to take on (estimate $85K in Repairs could turn into $160,000).

Appreciate all the support I have gotten from you guys.

Alice Crane

Alice,

Thanks for the update. Time for the next deal.

John Corey