I just placed a house under contract for 250k. The current market value of the 4/2 2100 sq ft house is 400k. House is in very good shape from the outside. The issue is that the daughter is estranged from the entire family. The mother, who lives out of state, owns the house free and clear. Returned receipt letters are returned unsigned phone calls go unanswered. The daughter is married with three children and mastiff dog.
I specifically extended my inspection period to 60 days to work this through.
Any advice would be appreciated!!! Thank you!
So did you get the house under contract with the mother, or the daughter?
whose house is it? Why do you care about the daughter?
Mother owns it. Daughter lives in it. Daughter does not know it has been sold. Will she destroy the house once she finds out that her rent free living arrangement is over?
So you got this under contract with the mother but now she is non-responsive? Did the mother skip town all of a sudden. Does the daughter now live in the house? If the mother's name is on the title then only she can sell it and so any extensions, closing, negotiating will have to be done through her. If you can't track her down you may want to hire a skip tracer if it is worth saving your deal. If it where me i'd just check her Facebook, you may find the clues you need.
Don't buy someone else's problem.
Have an "out" clause in the inspection contract that if it doesn't meet your expectations, the contract is null and void.
This would cover you in the event the daughter goes completely ballistic when she finds out she's out on the street.
"Hell hath no fury".....well, you get the idea. Best of luck!!! Hope it works out for you.
I am sorry that this is not clear.
Mother owns the house and signed a sales contract.
Daughter lives in house and doesn't talk to the mother.
How is the best way to approach the daughter about the sale of the house??
Still not clear. Are you sending letters to the daughter living in the property and they are being returned?
You don't approach the daughter about the house being sold. You approach the seller because you need entry for inspections. If she can't arrange that then buy it for a worse case scenario price (which I often do) and agree to take as is with the current "tenant situation". When the mother finds out that she can't sell it for top dollar without managing her tenant, she may rally and speak to her daughter. Or if not, you'll get a deal.
Wholesalers are supposed to solve problems, not create them. Make it easy for the seller to sell you her house. You haven't lived until you've bought a house without an interior inspection.
Will she destroy the house once she finds out that her rent free living arrangement is over?
Hmmm. Magic 8 ball say "future cloudy". Who knows what the daughter might do. From what you write it doesn't sound like this will go down smoothly.
You could wholesale it and then your end buyer will have to evict the daughter. The fact you can't get in and have an ugly situation pending is going to require a discount off the true value of the property. If mom doesn't realize that bring it to her attention might be a wake up call. Or, it may be she really doesn't care and is willing to give up some cash to let someone else deal with the situation. You might be able to leverage this to get a good deal.
These are the situations where a wholesaler truly adds value! This is an adventure and a chance to make some good money. Probably around 50k
First, don't fear something you don't know isn't a certain outcome.
1. Make sure you know the law on non paying occupants and what their rights are and what the owners rights are. This is important, knowing is half the battle (GI JOE!)
2. Make communication with the daughter, I'd go there in person myself. Be polite and deliver the news. There is a reason the mother handed this problem onto you. You are getting paid a lot to deliver a message she is afraid to.
3. If the daughter trashes the place, so what? The house is owned free and clear and you have an inspection period. If it gets wrecked your price goes down and the daughter will likely be easier to remove because the police will now be involved.
Go there, get the message across and bring pepper spray if you are nervous and figure out what is the next step. If your numbers are right you have enough room to offer a little cash for keys. This sounds like a great deal if you are right on your values.
edit: Jon's right you can just sell as is and let the next guy handle it. I love tenant situations so I do it myself and make more money for that ability. You could just unload as is for a discount in your price to the end buyer.
you could offer the daughter money to leave peacefully.
thanks for the advice!
Join the Largest Real Estate Investing Community
Basic membership is free, forever.