Property worth 100k with a 69k mortgage

12 Replies

About to get a contract on a house that is worth 100k ARV but has about 60k mortgage on it. I need some help on how low should I get the contract to be fair to the seller and so i can make at least 4k from the deal. I would like to get the seller about 5 to 10 k. I am in mt airy nc. (NOT TO FAR FROM WINSTON SALEM NC). Please help. They are a motivated from the call...

sorry all the property is worth about 100k with a 60k mortgage on it

@Daniel Williams , I'm not a wholesaler, but I am an investor.  I'm not sure there's enough room to make a profit for the owner, for you, and for an investor.

I assume you mean the house will be worth $100K once it is restored to great shape.  That would mean it is not worth $100K in its current condition.  If that's the case, you need to figure out how much it will cost to repair it to the condition where it will be worth $100K.  If it is more than a few thousand, that will leave a very thin margin for an investor.

If you mean the house is worth $100K in its current condition, what is that current condition?  Is it in great shape, with sparkling hardwood floors, new carpet, new paint, and very little to be done anywhere, inside and out?  Or, is it worth $100K right now but it needs some work, and once the work is done it will be worth even more?

If you are trying to wholesale this (which it sounds like you are) you want your offer to be 65% of the A.R.V - Repair costs. You really shouldn't be concerned with what the seller makes on the deal. You can only offer what it makes sense for you to pay. I have done several deals where the seller has LOST money. It all depends on what their needs are. Is the MP killing them? 

This sounds to me more like a family/friend who you are trying to kind of wholesale their home.

Medium head icon colorRyan Dossey, Call Porter | http://Callporter.com

this appears to be a sibject to deal.  

I put my new wholesaling brain to work and this is what I crunched out:
Seller’s Lien/Mortgage Amount $60K
Comp/ARV about $80K
My Offer price $42K (Which is $80K x 65% - $10K)
Looking to Assign it for $45K ($3K for me)
However the seller will still be in the whole $18K not to good.

If this is a subject to deal can I assign it for $7K and give the seller $2k and I take away $5k?
Will this be attractive for a property with about $20+ in equity?

@Daniel Williams it's not a wholesale deal unless it's in perfect turnkey condition then MAYBE you could find someone to pay cash for a buy n hold. My advice is there's not enough equity to pursue. Get an agent to work with and see if they can sell it. Plenty more houses out there with much more meat on the bone for you to get your first deal. 

Good luck.

is the seller in a hurry to sell this property? If it's worth 80k or 100k ARV, either way with 60k mortgage that's less than 50% equity. Have you looked into a lease option wholesaling instead of traditional wholesale?

Is lease option the same as subject to?

It's complicated. I would say no. Lease option could be done as a part of a subject to deal but lease option does not equal sub2. Lease option wholesaling is simply a strategy where you get a property under contract, usually those with little to no equity, then assigning it to a tenant buyer who can qualify for a financing within a certain period of time. 

If you go to remotepropertyflipping.com Joe McCall has a great introductory video on wholesaling lease options.

Not complicated Daniel... You just made that really clear.  I got it now.  You guys are awesome!!!  I love this place.   I can take a Subject to for myself and then find a tenant to lease option the property... I collect their rent for a profit and when they buy the place I collect the equity created by the increase in the market and the decrease in principal from the payment of the rent. 

Originally posted by @Daniel Williams :

Not complicated Daniel... You just made that really clear.  I got it now.  You guys are awesome!!!  I love this place.   I can take a Subject to for myself and then find a tenant to lease option the property... I collect their rent for a profit and when they buy the place I collect the equity created by the increase in the market and the decrease in principal from the payment of the rent. 

 Hi Daniel,

If you are in NC lease to own is not the best.

NC has rules on evicting a non paying tenant buyer.

http://www.ncga.state.nc.us/EnactedLegislation/Sta...

Buying Sub2 in NC is ok, get a good attorney.

Selling/Leasing on a Lease and ROFR  (right of first refusal) is definitely better.

Medium banner reiskills 997   copyBrian Gibbons, REISkills | [email protected] | 818‑400‑3046 | http://MyREISkills.com

Thanks Brian I will look into this.  Thanks to everyone for helping.