Wholesaler · Dallas, TX · Member since 2014 · 78 posts · 32 votes
A seller came directly to me and asked if I can help with her situation. Of course, being the kind, helpful person I am, I told her I will see what I can do. Owner wants completely out of being a landlord. In fact she said, it was a huge mistake becoming one!
She then proceeds to give me the following facts:
Rent: $725
Mortgage: $955( Do you see why she wants out!? She is coming out of pocket)
Mortgage Balance: $50,224
ARV: From the numbers I ran(not too many sales in area)- $52,000
Additional Facts: Current tenants want to purchase the property. Property is located i Wichita Falls,TX
To my knowledge, I don't believe I can do anything as a wholesaler for her. However, I would still like to point her in the right direction with assistance with this. Real estate can get pretty creative, so I know there must be a viable option for her.
Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
9y
A buy and holder like me would be interested in a cash purchase at about $46,471 provided it's in pretty good shape. Can she bring a few grand to closing to end her nightmare?
If the tenant is not paying or a PITA, the price drops.
Your buyer is a capitalized buy and holder, not a flipper. The rent rate is the carrot for us.
Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
9y
A buy and holder like me would be interested in a cash purchase at about $46,471 provided it's in pretty good shape. Can she bring a few grand to closing to end her nightmare?
If the tenant is not paying or a PITA, the price drops.
Your buyer is a capitalized buy and holder, not a flipper. The rent rate is the carrot for us.
Investor/Landlord · Farmington Hills, MI · Member since 2011 · 1k+ posts · 1k+ votes
9y
If the current tenants wish to purchase the property, why isn't the owner exploring that sale? If the tenants do not qualify for financing, this could still be an excellent purchase for an investor. The owner is hurting and needs relief. What price are they willing to accept to end their pain?
Lender · San Antonio, TX · Member since 2016 · 1k+ posts · 1k+ votes
9y
@Bara Nwokoma Properties in Wichita Falls are appreciating over the last decade or so, so the only way she could be nearly underwater is if it is in need of significant repairs, right? You said the ARV is $52k - I hope you mean that is the as-is value. If the ARV is significantly higher making those repairs, maybe there is room for a rehabber to take over. You need to provide some more details for an accurate response though
Wholesaler · Dallas, TX · Member since 2014 · 78 posts · 32 votes
9y
@Jeff Rabinowitz tenants do not qualify for financing. Owner has tried going that route. She mentioned that she has no money to bring to the table. Sounds like she wants someone to buy the house for what she owes.
@Frank Jiang - Information given by seller. She is going to verify actually numbers & her interest rate & payments.
Insurance- $160
Taxes- $86
Principal/Interest- $710
@Jason Hirko house was repaired to make rent ready. I haven't seen the house myself. 2 hour drive for me. Realtor ran comps and said ARV is 52k. I know that area is appreciating but that ARV im not jiggy with. Not sure how to go about verifying ARV . Checked numbers on Propelio, no recent sales popped up for the past year.
Verifying ARV on this one, will definitely put more things into perspective. House is a 3bd 1.5 bath @ 1156 sq ft
Per Month??? Something's not right here. A 30-year note for a 50K mortgage at today's interest rates should be less than $250 per month in principal and interest. The owner either has an usurious interest rate or is holding a short amortizing note (5-10 year mortgage). Maybe they have second position liens or lines of credit on the home as well.
Also, 160 per month in insurance is also pretty high. Is the house on a flood plain or something?
Lender · Boulder, CO · Member since 2017 · 8 posts · 4 votes
9y
These are my favorite deals. Get it under contract subject to. Lease purchase with current tenant with rent increase to cover nut or find a new buyer that is almost mortgage ready. You can make usually 3 pay days on these if you work them right. Let me know if I can help.
Wholesaler · Dallas, TX · Member since 2014 · 78 posts · 32 votes
9y
@Account Closed -Ah!!! That makes sense now.
I appreciate everyones response. I will continue to update and let y'all know what is going on. Also, I reached out to another realtor to gather comps for me. She does business in the Wichita Falls area.
you can't look at the current balance and the monthly payment and determine interest rate. For example, if she had a $100,000 note and a payment of $700 a month, the interest rate would be in the 6's. If that was 15+ years ago, and she's paid the principal down by $50,000, her monthly payment is still $700, even though she only owes $50,000.
So I would just ask to see her loan docs if she can find them. Maybe the realtor that ran comps is mistaken about the current value (not to be confused with ARV!) or maybe it has gone down in value drastically due to condition etc.?
Investor · Scottsdale, AZ · Member since 2016 · 1k+ posts · 885 votes
9y
@Jason Hirko Thanks Jason. I was a Loan Officer and I am very familiar with what you speak. I am assuming that with the hot market in Texas, any house that is currently worth $52,000 was not an expensive house 15 years ago and probably wouldn't support a large loan amount. If the owner doesn't know her interest rate, she is an unsophisticated borrower and likely is paying well above normal interest rates.
Wholesaler · Dallas, TX · Member since 2014 · 78 posts · 32 votes
9y
Update:
I stayed in contact with the owner. I provided several options to her. 1- Why dont you just raise rent? 2- We could take the short sale route
Ultimately her father came and said they would get the funds to get the property where it needs to be. I was confused on his statement because she isn't behind on mortgage payments.
Either way, I provided the best value I could to her. She mentioned that she will refer me to other folks that are looking to sell.
Podcaster & Multi-Family Apartment Investor · Denver, CO · Member since 2016 · 273 posts · 138 votes
9y
Help her refi her house with a 12% interest only loan at 520/mo payment and she will save 400/mo
I know 100s of investors who would JUMP at a 12% interest only loan.
Good luck!
Adam Adams
Wholesaler · Dallas, TX · Member since 2014 · 78 posts · 32 votes
9y
@Adam Adams thank you for that suggestion as well! That was a route she thought about but she wanted completed out of the property but it seems her father doesn't want her to let it go. She is an accidental landlord.