I am working on a wholesale deal with someone who has a buyer that has $5000 to put down for a house and wants to pay $400-$500 a month for it. It is my job to find the home. I've found a house for sale by an owner who wants $60,000. The mortgage is not free and clear. No repairs have to be done to the house. Will this house work with the numbers the buyer wants to work with?
I know this may be a dumb newbie question but I am very new to this and just want to hear what people with more experience had to say. Thanks!
only if the owner wants to seller finance.
Hi Jacolby. There aren't any dumb questions in this business.
I think the issue is the owner still has a mortgage on the property. The $5K down from the buyer is great but probably won't pay off the mortgage, nor pay your fee for finding the deal, so this one seems problematic to me. Upon sale the owner is going to need to be taken out of the mortgage unless selling subject to the existing financing is possible. That is another animal altogether.
Personally I would look elsewhere. In my own experience a wholesale works much better when the new buyer can take out any mortgage in place or the seller owns the house free and clear. Other investors in the BP network may have some different advice or experience.
Good luck and congratulations for taking the first step toward your investing goals!
@Account Closed I think people will need some more details in the numbers to adequately help you. Will this be a primary residence or investment for the buyer? with 5000 dollars down/500 month, assuming it is for a primary residence, I would think that generally speaking she probably could afford a 60-90K home. But you have to provide more details to get a more specific answer. Also it also depends on home much you are going to squeeze from her as a wholesaler..haha