Deal? If so I need help funding or options please!

8 Replies

I'm a newbie and this would be my first project outside of my personal house. Looking to flip this first if it doesn't sell id be willing to refi and hold as a rental. 

House Location: UT (Im in california) I just took a trip to meet up with the realtor team I've been dealing with.

This house is a foreclosure (someone started to flip this and it foreclosed) All big ticket items are new.

Asking price $92,500 (I'd be offering $85,000 to start)

To finish the rehab: $10,000

Comps for the area are $120,000

Realtor is pretty confident He could sell for $130,000

I have enough equity in my current house to do the deal alone, just looking for other options, offers to do this without pulling money out of my house.

Thank you for everyones input ahead of time!

Josh

Joshua Redmond

    Most on here would figure 70% ARV . If you can get the property for 74k and stick 10 into it your doing good. ( I went off of the 120k ARV , since that is what the comps are). If you get 130 for it then thats even better. You just want to be careful and not overprice it and scare a potential buyer away.

    Let me see. "This house is a foreclosure (someone started to flip this and it foreclosed) All big ticket items are new..." combined with "I'm a newbie and this would be my first project..."

    And the topic is "Deal? If so I need help funding or options please!"

    I see way too many red flags. At least 3. That's a no-go.

    Another red flag: "House Location: UT (Im in california)"

    Another red flag: "Asking price..." I thought this house was a foreclosure? That means the trustee is in control, not an agent. At best, you don't know terminology and for foreclosure investors this is a red flag.

    Someone posted recently about "risk". This kind of "deal" is the definition of "risk".

    I am from San Diego. Since this is not going to be your primary residence the rates will be base on Non Owner occupied residence . Need to ask  a mortgage brokers what that number will be if you choose to  go that route. Let me know I have one handy. Pick a property near your location. Do NOT be an Absentee owner of another state.  My brother in law is a electrical contractor who bought a property in Florida. He took a loss on that property. Stay around your area.

    I use to sit on HUD sub committee for foreclosure. Just wanted to share the process.

    The foreclosure sale usually takes place at one of three possible sites:

    1. The courthouse steps;

    2. The trustee’s office;

    3. The property (homeowner’s home).

    The auction must take place, according to state law, on a regular business day. At the scheduled time, the home is sold to the highest bidder.

    If a homeowner has already been notified of a sale date for their home, it is still possible for you, the LMP, to assist the homeowner in saving the home either by working with the lender, the trustee, or through some alternative method. Your level of success is based entirely on your willingness to take the necessary steps in order to help your client save the home from foreclosure.

    DEFICIENCY JUDGMENT

    Once a home is sold at auction, any proceeds from the sale are used to pay off the balance on the mortgage loan, including past due payments, late fees, attorney’s fees, etc. If the home does not sell for a high enough price at auction, then the mortgage lender may have the right to pursue a deficiency judgment against the homeowner for the repayment of any remaining balance.

    However, not all states, allow this action. Check local foreclosure laws for specifics on deficiency judgments in the state(s) in which you are working.

    RIGHT OF REDEMPTION
    The Right of Redemption (same as “redemption right”) is defined as: The right granted in some states for a mortgagor (trustor, homeowner) to redeem ownership of real property, within a specified amount of time, after a foreclosure sale and upon payment of the amount of debt plus, interest, unpaid taxes and all costs incurred (arrearages, etc).

    The redemption period (length of time) varies depending on the foreclosure laws in the homeowner’s state. Some states have no statutes allowing for mortgage redemption after the sale, which means, as far as they are concerned, the foreclosure sale is final.

    State Security
    Instrument
    Foreclosure
    Type
    Initial
    Step
    Number of
    Months
    RedemptionDeficiency
    AlabamaMortgageNon-JudicialPublication112 monthsAllowed
    AlaskaTrust DeedNon-JudicialNotice of Default3NoneAllowed
    ArizonaTrust DeedNon-JudicialNotice of Sale3NoneAllowed
    ArkansasMortgageJudicialComplaint4NoneAllowed
    CaliforniaTrust DeedNon-JudicialNotice of Default4NoneProhibited
    ColoradoTrust DeedNon-JudicialNotice of Default275 DaysAllowed
    ConnecticutMortgageStrictComplaint5NoneAllowed
    DelawareMortgageJudicialComplaint3NoneAllowed
    District of ColumbiaTrust DeedNon-JudicialNotice of Default2NoneAllowed
    FloridaMortgageJudicialComplaint5NoneAllowed
    GeorgiaSecurity DeedNon-JudicialPublication2NoneAllowed
    HawaiiMortgageNon-JudicialPublication3NoneAllowed
    IdahoTrust DeedNon-JudicialNotice of Default5NoneAllowed
    IllinoisMortgageJudicialComplaint7NoneAllowed
    IndianaMortgageJudicialComplaint53 monthsAllowed
    IowaMortgageJudicialPetition56 monthsAllowed
    KansasMortgageJudicialComplaint46-12 monthsAllowed
    KentuckyMortgageJudicialComplaint6NoneAllowed
    LouisianaMortgageExec.ProcessPetition2NoneAllowed
    MaineMortgageJudicialComplaint6NoneAllowed
    MarylandTrust DeedNon-JudicialNotice2NoneAllowed
    MassachusettsMortgageJudicialComplaint3NoneAllowed
    MichiganMortgageNon-JudicialPublication26 monthsAllowed
    MinnesotaMortgageNon-JudicialPublication26 monthsProhibited
    MississippiTrust DeedNon-JudicialPublication2NoneProhibited
    MissouriTrust DeedNon-JudicialPublication2NoneAllowed
    MontanaTrust DeedNon-JudicialNotice5NoneProhibited
    NebraskaMortgageJudicialPetition5NoneAllowed
    NevadaTrust DeedNon-JudicialNotice of Default4NoneAllowed
    New HampshireMortgageNon-JudicialNotice of Sale2NoneAllowed
    New JerseyMortgageJudicialComplaint310 DaysAllowed
    New MexicoMortgageJudicialComplaint4NoneAllowed
    New YorkMortgageJudicialComplaint4NoneAllowed
    North CarolinaTrust DeedNon-JudicialNotice Hearing2NoneAllowed
    North DakotaMortgageJudicialComplaint360 daysProhibited
    OhioMortgageJudicialComplaint5NoneAllowed
    OklahomaMortgageJudicialComplaint4NoneAllowed
    OregonTrust DeedNon-JudicialNotice of Default5NoneAllowed
    PennsylvaniaMortgageJudicialComplaint3NoneAllowed
    Rhode IslandMortgageNon-JudicialPublication2NoneAllowed
    South CarolinaMortgageJudicialComplaint6NoneAllowed
    South DakotaMortgageJudicialComplaint3180 daysAllowed
    TennesseeTrust DeedNon-JudicialPublication2NoneAllowed
    TexasTrust DeedNon-JudicialPublication2NoneAllowed
    UtahTrust DeedNon-JudicialNotice of Default4NoneAllowed
    VermontMortgageJudicialComplaint7NoneAllowed
    VirginiaTrust DeedNon-JudicialPublication2NoneAllowed
    WashingtonTrust DeedNon-JudicialNotice of Default4NoneAllowed
    West VirginiaTrust DeedNon-JudicialPublication2NoneProhibited
    WisconsinMortgageJudicialComplaint2-3NoneAllowed
    WyomingMortgageNon-JudicialPublication23 monthsAllowed

    Reasons why people lose their home

    A loss of an income, death in the family, medical expenses and other life-altering occurrences can happen to anyone, causing us to fall behind in our loan payments. If we neglect paying our credit cards it hurts our credit rating, but if we stop paying our home loan the situation is even worse, because the lender can foreclose, taking ownership the home. For most families, a home is not only a significant financial investment but also a source of pride. The loss of a home, due to unexpected events which leads to financial problems are most often associated with the following life changes:

    *Death of a family member

    *Illness

    *Loss of job

    *Cuts in work hours or overtime

    *Retirement

    *Injury

    *Divorce or separation

    Can be financially and personally devastating which can lead to emotion distress and crisis.

    Thank you all again. @Aaron Junck  @Ben Leybovich  @Chris Martin  @John Quebedeaux  

    @Chris Martin Sorry if my terminology is incorrect, but I did find this house on willow of all places. Has an mls listing #

    @Ben Leybovich Please explain why the 20k for rehab? I've been in construction 13years grew up around it as well. I was already figuring very high for what it really needs to cover other costs. It seriously needs 2 toilets 2 bathroom sinks to complete the vanities already in, about 500sqft of carpet and some misc drywall patches and paint... I can do everything but the carpet.

    @Aaron Junck My initial thought was to offer $75k, comps are 120K a similar house sold for 159K That matches this house 4bed 2bath, only difference is 100sqft. I like to stick to the comps though as we should for our spreadsheets.

    Thank you all again this is helpful knowledge 

    Joshua Redmond

      @Ben Leybovich  ok thank you I'm just trying to better understand each persons why so I know a future deal when it comes.

      Joshua Redmond

        Join the Largest Real Estate Investing Community

        Basic membership is free, forever.