Wholesaling Property with Mortgage

[Michael Olokode]

Hello, 

I have my first lead on a home and I am looking to wholesale it. I've been reading a lot on wholesaling but I am not completely sure how to move forward on this deal. The seller currently owes 90k on the mortgage and the home is worth $110k. The seller says the home is not in the best shape and needs a lot of cosmetic work (I have not seen the property in person yet). I have done some comps and the ARV seems to be around $120k-130K. My question is how do I go about making a deal when the seller has a mortgage? And are the margins for this property too thin to wholesale?

[Brent Coombs]

Originally posted by @Candi Rivera:

Shouldn't the offer cover the remaining loan balance?...

No. Never make an offer that is higher than what makes sense to YOU. 

If your offer doesn't cover their mortgage, so what? THEY would need to have a "short sale" approved by their Lender ie. murky waters (but not YOUR problem)...

So if $64k is your sensible number, then your maximum allowable offer (MAO) is $64k!