How can I structure this one???

5 Replies

I went through a property today that is listed on the market but Seller said it has been on the market multiple times and not sold and the home was built in 1912. I went in thinking I was gonna find some big reason why this isn't selling. I walked the entire property and there was nothing wrong, plumming is good, electrical, new roof almost new everything the seller said she has put about 20k into the property. Now it may not have sold on the MLS due to the area being ghetto and it has been listed at 105 but the sold comps I have seen are between 120k and 123k. The seller owes 91k still and I am trying to figure out what I can structure because I really don't think very much money needs to be put in for repairs the house in move in ready. She said she will take it off the market if I can help her out and she also said if possible she would like to get 10k out if it but she is also open to creative financing. Does anybody have some ideas/options that can be considered in this situation?? Thanks!

No part of this deal appears to be really good. There is not enough discount from ARV. If its been on the market for that long, then it doesnt really value at 120-123. It usually means that you are missing something. In our market area, there can be a value change every block or two in certain areas, so make sure you are really paying attention to the exact location.

From a wholesale standpoint, I see no "meat on the bone".  From a buy and hold perspective, there may be some small value in a Sub 2, but that is all that I can see for this property.

How about a sub2 wrap?? @Grant Kemp   talks about this in his podcast..

HI Darren A Sub2 wrap with as little down as possible check my blog on how to beat the due on sale clause and do the deal while protecting the buyer and seller

@Bill Jones,

The only way you can get around the due on sale clause is by committing fraud which I advise against.

Joe Gore

The real question is: What is this property worth to you?

You're either trying to buy equity at a discount, or cash flow at a discount. Which is it? Doubt there's enough to squeeze a wholesale fee.

Since it has not sold at $105k, let's say an offer was accepted at $100k. Subtract 8-10% commission, escrow and title, perhaps buyers FHA points, then $91k loan and there is no equity for seller. That's just the way it is.

If you gave the seller something for her "equity" like a used car, boat, motorcycle or some other equity stretcher, then you could buy subject-to the old loan if you're ok with its terms.

Otherwise, the real question is what you'd do with this property if someone gave it to you. How would you monetize the opportunity?

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