Realtor/ Wholesaler& Investor · Forney, TX · Member since 2013 · 21 posts · 2 votes
Hello my name is Marcus. I'm a licensed state of texas realtor and investor. I have a seller who is about to go into foreclosure within 2 half weeks. Principal balance $107,000, amount due to get loan current $22,000. Based on my comps, property is worth $150,000. I'm currently marketing the property as a seller finance deal with 25-30k down payment. I'm not sure how to do a subject to, but need some help or advice on make this deal work. House will need cosmetic repairs such as carpet, interior paint, update bathrooms. Maybe 7-10k to get it ready to sell on MLS. But I don't want to sell it. I need rental income. Any advice?
Lender · Playa del Carmen, México · Member since 2014 · 2k+ posts · 1k+ votes
9y
Hi @Marcus Ford. What does the loan look like: What's the interest rate and is it fixed. What is the monthly payment in comparison to market rents? Also, is it on a 30-year amortization, or something shorter? How far info the amort. schedule is it?
For the record, the deal you're selling has no real equity in it. If I were to buy it for $107K, bring it current for $22K, and do $10K in repairs, I'd be in the deal for about $140K. If I did all that and needed to sell 10 seconds later, I'd have to list with an agent for 6% commission and let's say 3% in price concessions and closing costs. At a $150K listing price, my transaction costs would be about $13K. At closing, therefore, I'd lose money on this deal. And that's not even considering your wholesale fee.
It would have to be one incredibly sweet mortgage to make someone want this deal. Am I missing something?
Realtor/ Wholesaler& Investor · Forney, TX · Member since 2013 · 21 posts · 2 votes
9y
@Mitch thanks for evaluating my deal. The property owner has a 5% fixed rate. Owner mortgage payment is $906.00 including PITI.
It will rent for 1275-1350 per month. I was attracted to this deal because owner agreed to allow me to takeover payment. Also this would made my first rental. Although the interest is a bit high, I will still cashflow. Should I?
Realtor/ Wholesaler& Investor · Forney, TX · Member since 2013 · 21 posts · 2 votes
9y
Mitch, I can also owner finance the property with 22k-25k down, and cashflow 600 or more because buyer will have to pay Taxes and insurance which come up to $375. So $906-$375 per month, my payment from owner finance person is 1300-1375 per month.