HELP!!! Is this a deal or a flop??

17 Replies

Hello BP family,

I ran into a situation that may be a deal, but I'm not sure. I need your opinion on what my options are?

Subject: 4br /2ba townhome in Lauderdale Lakes Fl. The estimated market value is $120,000, minor repairs need.

Owner: She owes $90,000 on the mortgage, she rents it out for $1600 and has a cash flow of $445.

Situation: The owner is going through personal issues and no longer wants the property. She said she would get rid of the property for $10,000-$15,000. She needs that money to move out of state and start over again.

Question and/or advice: Is this a wholesaling, buy and hold or flipping opportunity or is this a flop? Thank you in advance.   

So she, basically, wants to sell for $100 - $105k? With a value of $120k, the only viable option is buying as a rental, depending on condition and expenses. There's nothing there for a flip or wholesale deal at that price

Thanks Jason, 

So really I don't have a flip or wholesale deal. I would only be obtaining the home at 10-15k less and renting it out for cash flow if the numbers work.  Thank you for putting it in perspective for me. 

@Shaeida M. I agree with @Jason D. . Assuming $5k for minor repairs, and that you'll need to cover her $2k closing costs, that means your all-in cost would be $107K - $112K for a house with an ARV of $120K. I always assume it is pretty easy to find houses at 10% off market, which this basically is. A solid deal is at lest 20% below market (really I prefer at least 25%) after all costs.

I’d ask her if she’ll do a land contract seller finance with 15,000 down and then I would keep it and rent it out let the tenant pay the monthly payment on it at six or 7% interest

Another option is *subject to *- you pay her some money down and then take over payments as if you were her . The situation appears to be a good potential deal that could be creative in terms that can work in your favor . Just Make sure it’s recorded and she gets 10-15 grand and can walk away and you can come out smelling like a rose

@Larry T. I was trying to run the numbers and I couldn't find any room to make money and that's because it's not deal. I was hoping there was something I  was missing like the land contract that @Dennis M. mentioned.  Thank you for the advice Larry.

Subject to -can be tricky . I have not done one myself but understand them . Be sure to find out everything you can on this properties mortgage and appraisal and make sure it’s recorded with the courts .be sure you got a smart real estate attorney with experience working with you . I’d offer her ten grand cash and take over .. then either flip it or hold it for a rental . It cash flows good so I’d keep it if it were me

How long has her tenants been living there?

What about HOA fees?

$1,600 for a 4br/2bth seems like.

I don’t know your area of Florida, but here in Tampa a 4/2 is worth it’s weight in goal. I see 4/2 go around $2000 a month.

@Anthony Rodriguez The tenants have been living there for a few years. The HOA is about $250 a month. I am not from Florida, so I called a Realtor to ask about the area. The Realtor said the subdivision is not the best. It's a older subdivision and most of the units have not been upgraded since the 70's.

Originally posted by @Shaeida M. :

@Anthony Rodriguez The tenants have been living there for a few years. The HOA is about $250 a month. I am not from Florida, so I called a Realtor to ask about the area. The Realtor said the subdivision is not the best. It's a older subdivision and most of the units have not been upgraded since the 70's.

 I would walk from this deal. The numbers have to work. On a recent podcast someone said, "fall in love with the numbers and not on the house." 

If you are looking for great areas with great deals in Florida, check out Polk county. 

$120,000 value. 

$$1600 rent. 

A nice long low interest mortgage. 

LookS good to me. 

If you pass on this you don't belong. 

Assumption hood is 👌.

Roof-you say  Roof done and not done. Which one is it.