Saw this deal on Craigslist. What do you guys think?
"c.1800 Colonial style home located on a 1.83± acre corner lot along Route 9. Desirable Town of Madbury. Oyster River School District. Just minutes from UNH Campus and Dover.
2½ story home includes 2,352± SF GLA, 8 RMS, 4 BR, 1½ BA & partial basement
Attached 3-car garage, enclosed porch, vinyl siding, Big back yard with shed and in-ground gunite pool
FHA/oil heat. Private well & septic system.
Assessed value: $301,700. Estimated value after improvements $340,000.00+/-
2015 taxes: $8,327.
Obtained through foreclosure sale. Currently interior is occupied and not available for showing. Offering Assignment of Purchase and Sales Agreement. Closing by November 21, 2016 unless other arrangement can be made with bank. $40,000.00 due to me upon assignment and $140,000 due at closing. Obtain this wonderful home for $180,000.00 .
This is a fast flip for a small profit. If it doesn't sell before closing I will close, do some renovations and more profit upon resale at FMV. This is your opportunity to get in early on the deal I found and make the project and profit yours. Also perfect for home owner to keep and instantly build sweat equity ."
Could be real......due diligence required for sure though.
@Anthony Angotti I will be stopping by the house today after work. The wording that confuses me is "Currently interior is occupied and not available for showing." and "$40,000.00 due to me upon assignment and $140,000 due at closing."
I thought you can send a 24-48 hour notice to tenants and let them know about a walk through.
I am not even sure about the 40k due upon assignment is suppose to mean either.
Well you are supposed to be able to send notice so that is kind of odd.
Also, $40,000 is a wholesaler fee and is ridiculous. I don't even know why they would post that......
Like I said use pretty good due diligence here. Maybe someone more experienced than I with these kinds of things can chime in.
5:1 odds this is already listed on the MLS for $140k. An ARV without repair estimates. Knowing it is a $340k ARV is worthless to the buyer if it needs a $200k rehab, right?
Interior not viewable? Sure. $40k due upon assignment? You bet! At least you'll be able to resale it at 'FMV'.
Rookie wholesaler that is close with his wording, but this isn't horse shoes ya know.
Check the MLS. Current owner bought at foreclosure sale. Keep us posted @Christopher Wedde !
OK here is the way I read this. @Steve Vaughan
Unlike our foreclosure sales many east coast sales you bid with a non refundable deposit and then you have 30 days ( just like a normal escrow) to close up the balance..
this person it looks like bid and won at a sale ( if we think he is correct in detailing what happened).
and now wants to assign his right to purchase on the close date.. Now not sure if the sherrif will allow substitute vesting's.. however as one person pointed out someone could just sell the interest in the LLC that was used to purchase this.. IF in fact they bid in the name of an LLC.
Can't get into the property because the bidder who won does not have any landlord privliges until he actually takes title. The owner living there does NOT have to let anyone in.
And if they won't you stand a good chance the house will be missing anything of value when you boot them out..
buying foreclosures with hold over owners can be pretty risky.. sometimes NP other times they strip the house.. I have had it go both ways many many times..
that's my reading between the lines.
Also I would not give anyone that kind of assignment fee until he closed on the deal or your darn sure there are no title issues etc.. if it was me I would ( since he says he has the dough) make him close and open escrow now to buy it from him a day later with title insurance. There also may be rights of redemption in that state.. lots going on in this one... and you don't want the greater fool theory to raise its ugly head
Thanks for that explanation @Jay Hinrichs . It makes more sense now. Still a rookie wholesaler asking an outrageous assignment fee while giving the buyer all the risks.
I totally agree then. Make the wholesaler close then buy properly with title insurance if at all. Definitely research rights of redemption in the state the property is in.
Bravo again, Jay! I think I'll just go ahead and stay out of east coast property discussions. I would still quickly check the public MLS, but I didn't even consider it being an auction sale with the old owner-occ still being in there. Cheers!
"This is a fast flip for a small profit"
Yet he's walking away with the $40,000 assignment fee AND he said no showings will be available. Last but not least, he disclosed his fee and advertised this home on Craigslist instead of his own buyers. As everyone says, do your due diligence, but the fact that he's not looking out for the investor by asking for such a large assignment fee and saying the investor will make a small profit raises some concern.
@Steve Vaughan its a live and learn I have funded a bunch of foreclosures in those states over the years and they are FAR MORE complex than what we deal with on the west coast.
has to do with mortgage / right of redemption/ sherrifs power/ judge signing off etc etc.
Whereas here on the west coast which is a Trust Deed states the power of foreclosure is the Trustee and the sale is final no putting the Genie back in the bottle.. its goes to Deed Theory.
Okay looks like I have some work to do. Some things I never heard of before, granted I haven't heard of much. So I'll start looking into things then. Got a lot to learn on this one. Thank you all for the help! I'll post updates as I find them out.
Okay so update. Called the town the house went into foreclosure and was on auction on OCT 7th. No other details after that. Looked at tax records owners haven't paid them for a while. Taxes owned right now is over 13k. Emailed the wholesaler got a phone number, will give him a call later. Also stopped by the property, very run down and not taken care of. For sale signs in the front yard with different phone number (I believe it is the "old" owners), also will give them a call. Tax assessment by the town puts the price at 300k. 180k for the house and 120k for the land. Haven't done comps in the area yet but it seems like 300k is the average asking price for house in the area. Plus there is a new development down the road. This is one of the worst houses in the area right now since it looks like nothing has been done for years and a couple cars are just rotting in the field. Not sure how the inside looks but I'll assume the worst. So it could be very expensive to fix this up. So if I paid the fee, I am looking at 53k to start, with a possible eviction depending on how the "old" owners feel. 140k house and, too throw some numbers, 50k - 100k for repairs. So total costs are 243k - 293k for a place that might go for 280k - 340k. So worst case as of now is a -13k profit (or loss). Could low ball at 90k for the house. If 203k it will have the highest repair cost and if I can find another 53k I can repair most things by myself.
Originally posted by @Christopher Wedde :
180k for the house and 120k for the land. Haven't done comps in the area yet but it seems like 300k is the average asking price for house in the area.
I would start with actually running Comps. You might be spinning wheels on a deal that literally isn't there until you know this.
You don't need the "average" for the area. You need the average for houses as similar to this one as possible that have sold as recently as possible. If all of those houses giving your "average" are built in 2000 or newer, or most are a rambler, ect...then this might not be an accurate ARV for your property.
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