Hello, everyone. I have my focus on a property that seems to be a great deal, but I don't know what a buyer could possibly do with it..so I don't know whether I should have my lawyer make a seller's contract to begin the wholesale process. It is a colonial style home built in 1850 with 3 beds and 2 baths. The parking lot is paved and excessively large enough to park more than a few cars, 10 school buses can fit in the lot. The home was last sold for 272k in 2007 and the owner had no luck in selling the property starting in 2011 through 2014, until it was sold foreclosed back to the lender. The lender has been unable to sell the property and now wants only 100k for it. I contacted the seller and was given the key codes to look inside the property, so I did and took many pictures. I have a buyer in mind that is actively rehabbing homes and recently told me he has 50k in cash and can get loans for the rest on a great deal. The comps show this property is valued over 200k. Here lie the problems.. I am new to wholesaling. I do not know the rehab costs of the property even though I took a look inside because I am new, but I did take a lot of pictures, and could possibly revisit inside with a contractor for an estimate. I cannot calculate ARV x 70% - repair costs for my MAO because I don't know the repair costs and the property is so old I do not know if my comps research would reflect accurately for an After Repair Value. Theres also the chance of there being asbestos. I know that real estate is a game of opportunity, and the profit is made in the acquisition. I've focused on finding buyers and then sellers, but I've read that you should get a seller's contract on a property when it is a really great deal and the buyers will follow. If I do choose to do that then I could put exit clauses in the contract. What should I do?.. This will be my first wholesale and want to make the best moves right now. If the move is go on to another property then I will.
How much were they asking from 2011-2014 when it didn't sell? That's a solid indicator that they overpriced it...which will at least give you an idea of what it isn't worth.
Sounds like a very unique/historic property, which may limit your pool of potential buyers. Which in turn means the normal laws of supply and demand (which determine value) are more difficult to apply.
@Jeff Copeland Previous seller was asking for 265k down to 181k until it was foreclosed. Now its the original lender's headache, and possible a nice little jackpot for me. Would rehabbers touch such a historic property? There could be asbestos, too. I am also hesitant to ask buyers if they would invest into a property like this because I don't have the seller's contract, yet, so I don't want to market a property that does not have my equitable interest, or even have the property bought right under me.
I also need advice. I have a great little house under contract. It is a 3 bedroom 1 bath house. It's an old house, but it's been maintained very well. The ARV on the house is $49K. The property needs about $2-4K worth of work at the most. It was rented for $650.00. I am having a hard time getting the property sold to a buyer. What is wrong with these numbers? Why don't they work for an investor.
I learned that the property has hardwood refinished floors, new windows, a new roof, and new plumbing, even though I took a look inside the property and could have known that myself had it not been the first property I ever looked at inside and if I wasn't so focused on the age of the home itself.. I am most likely going to start a seller's contract with the seller and have my name on it with and/or assigns next to my name, so I can have a buyer purchase that contract from me. I'll have exit clauses in the contract in case I can't find a buyer. Although, I am getting more confident that I will. The only thing I am truly worried about is the chance of there being asbestos. How can I find out if there are any from a reliable source? Would I be held liable if there are asbestos found later, since I never actually owned this property?
@Kaye Thompson How much does the seller want for the property and how much are you selling your contract for? Maybe the spread is not enough for a buyer to want to spend 2-4k and their time.
Hi Ricardo AcevedoThe contract with the buyer is now $28.5K, I am at this point only asking for $200 for assignment fee.
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