So I've been direct mail marketing and this lead came in:
The situation: The owner and his ex-wife still have joint ownership of the property. Ex-wife's son is living in the property and supposedly fixing it it up. The owner has been making payments, until recently he found out that the ex-wife's son was paying rent (which was going straight to the ex-wife, not the property), so he stopped. When he stopped, the ex-wife didnt resume the payments. Currently the house is in pre-foreclosure and the owner just wants out. He needs a signed contract for $82,000 on June 12th to show the judge, convincing him to relinquish it from the ex-wife who has not contributed to the payments. The $82,000 is the full amount owed on the property. Property is in New Bern, NC.
Numbers: This is what I have so far. It will be difficult to get an accurate scope of work since the ex-wife's son is still living in the property. It is not clear whether he has fixed and maintained the property or has trashed it.
Resale Price: 125-130K
ARV: 135-140k Not much to repair, all cosmetic.
"Rehab" Costs: Siding 1.5K, Carpet 1K, Refinish floors 1K= $3,500
Potential Rent: $900-1050
Wholesale Fee: 6-8K
Seller Contract: 82K
Assignable Contract: 88-90k
Is this worth pursuing?
Is it too much risk doing the due diligence/further research and finding a buyer when it is not a guarantee that the judge will grant the property to the husband?
Are there any issues that I may run into that I'm not seeing here?
Curious how you can assess rehab costs when you have not viewed the interior? Answer - you cannot. Big mistake new investors and even seasoned is forcing a deal. Let them come to you as I always like to inform all parties - " I am a buyer who does not have to buy!' Make it subject to your inspection prior to court date.
I threw the rehab cost in there based on the sellers most current knowledge of the property and my understanding of what it cost in this market. Those numbers will most certainly be prefaced by a disclosure when I go ahead and market this. Thank you for the advice.