Dallas, TX · Member since 2015 · 32 posts · 6 votes
Hello! I received my 1st call back via direct mail!
Here are my rough estimates ARV: 150k 70% = 105k Repairs: 10k* (I actually have no idea, I'm going to check it out in person on Tuesday. He mentioned nothing major at all, all cosmetics.) Fee = 5k
105-10-5 = 90k
The issue is that he has 2 mortgages, 1st for 92k (behind by 12k? I need to clarify) and 2nd for 20k. That's a total of 112k.
Even if he accepted the offer for 90k is this a feasible deal for investors?
Investor · Watertown, NY · Member since 2015 · 225 posts · 88 votes
11y
You'll need to get the mortgage current to do a lease option or else risk the foreclosure, you'll need to know about process for your state.
Lease option is viable if the condition is tenant ready which doesn't sound appropriate, but if he still lives in the place, when does he plan to move? Are you going to assist him moving knowing he's about 12K behind? What are your other exit strategies?
Can you keep this guy from getting foreclosed on if you're still researching how to do a short sale?
This is someone's life that you're "learning" on. I'm not saying you're responsible for how he got there, but are you improving his situation or just yours?
Property Manager · Griffith, IN · Member since 2015 · 1k+ posts · 913 votes
11y
it's a short sale so mortgage holder needs to approve and probably not likely until it's listed and there was a good faith effort to sell it for more. Owner can pay the difference but if he had the cash, he probably wouldn't be in this situation.
Flipper/Rehabber · Atlantic County, NJ · Member since 2012 · 514 posts · 209 votes
11y
Sounds like a short sale as stated above. Anytime a seller says its nothing major, its usually something major! It's always just paint and carpet lol! You need this property at 60k'ish.
For this to be you're first wholesale deal I would pass, to much unknown.
There are better opportunities out there.
Send more letters take more calls, it's a numbers game...
Investor · Boise, ID · Member since 2015 · 218 posts · 107 votes
11y
One tip I remembering hearing is where wholesalers develop a relationship with RE agents and give the deal to them when they come along. They can then work the short sale. You might be able to work something out with the agent where you could get access to the MLS or have them run a few comps in return. I'm sure there are other benefits to developing a relationship with an agent as well.
Dallas, TX · Member since 2015 · 32 posts · 6 votes
11y
Hi all,
Thanks for the feed back! I've been busy working on a paper and presentation. Talk about timing right?
I need to research more about short sale because I don't understand it enough.
I've also been told to see if I can take over the payments and see if it's feasible with a lease-option type of deal. So when I check out the house on Tuesday I'm going to ask about mortgage payments that he makes.
I have a realtor that I worked with in the pass so if nothing goes through I'll just hand him the realtors card.
Investor · Watertown, NY · Member since 2015 · 225 posts · 88 votes
11y
You'll need to get the mortgage current to do a lease option or else risk the foreclosure, you'll need to know about process for your state.
Lease option is viable if the condition is tenant ready which doesn't sound appropriate, but if he still lives in the place, when does he plan to move? Are you going to assist him moving knowing he's about 12K behind? What are your other exit strategies?
Can you keep this guy from getting foreclosed on if you're still researching how to do a short sale?
This is someone's life that you're "learning" on. I'm not saying you're responsible for how he got there, but are you improving his situation or just yours?
Investor · Sherman Oaks, CA · Member since 2008 · 6k+ posts · 3k+ votes
11y
You better watch out for foreclosure rescue laws in your state, and FBI and Attorney General's office really doesn't want any consumers messing around with peoples houses that are behind on mortgages doing creative deals
Foreclosures and short sales are not a place for you to make a lot of money these days unless there's a huge amount of equity, and even then unless you buy the house out right for cash (ie what not to do is you cure the note and buy on subject to) you're risking getting the authorities involved with foreclosure rescue activities
You might consider a joint venture with the seller
150,000 minus costs to sell of 10% 15k = 135k
Pay the 112k = 23k - 10k in repairs = 13k
I would see if you could split the 13k
Give him a note for 6,500 , Fix the house and resell and make 6500