Hello BP community
I have a question that I'm hoping someone with more wholesaling experience can answer for me
I am in the middle of the negotiating stage of buying my first wholesale property. (I'm buying the property to wholesale to another investor) I talked to the seller and found out the property has a mortgage for approx. $81k. Based on the ARV of $120k I wanted to give an offer for $70k all cash.
If the seller chooses to sell to me for $70k, who has to pay to full fill the mortgage for the remaining $11k? And do I need a copy of the most recent financial statement for the mortgage?
Thank you in advance for your time
Assuming you don't want to pay it, yes the seller would have to pay it. The title co. will get an official pay off from the lender for the closing. Don't be shocked if the seller tells you to go away.
@Wayne Brooks So ideally, I'm supposed to cover the mortgage with my offer? Also would the bank even transfer the deed if the mortgage was not full filled? Would it trigger the due on sale clause?
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@Jonathan Frausto I would let this deal go unless you can make money buying it at $81,000. Also, I would ask for proof of the current mortgage payoff amount from the seller to verify that they do owe $81,000.
@Jonathan Frausto , how much would your Buyer need to be putting into it (repair/rehab costs) to bring it up to ARV? Or, are you saying it's ALREADY worth $120k?
The Seller by themselves won't have the authority to sell it for less than they owe! My 2c...
@Brent Coombs we estimated the repairs at $15k. So AFTER the repairs we had solid comps at $120k with approx 30 days on market. So thats where this whole dilemma came in, if we bought at $81k, then our numbers won't work and this deal won't work. Not only that there was still $2585 worth of property taxes that still needed to be caught up but I really appreciate your thoughts. HUGE help guys
@Chris Piper once the buying price goes past $73k, our formula and numbers don't work. So it's sad to say but this deal might be a bust then. Appreciate your input!
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