Wholesaling a home with a mortgage on it??

3 Replies

I am new to the phoenix Arizona area I just came across a deal and i'm wondering if the numbers add up the house has a mortgage on it that the sellers want to be paid off the area where the house is in a decent area they did some work on it they added an extra bedroom so instead of it being a 3br/2th its now a 4br/2th 1,400 sq foot with a lot size over 6000 sq ft the mortgage thats owed is 53k the house needs minimal repairs it really just needs to be updated they want are asking 102k free & clear and they want the mortgage of 53k to be paid off  total asking price including the mortgage price 155k is the total asking price houses in that area have sold for a wide variety of price range is my concern they range selling price is anywhere from 80k all the way up to 210k  properties withing the 1 mile range of the house have sold for 170k to 210k is this a good deal or should i try to go back and renegotiate the deal

1. get a more accurate number on value 2. how much in fix up? 10k? 20k? 3. talk to an agent in that area and have them pull up houses that have sold in that area for cash within the last 6 months within. 1/2 mile radius of the property. if you can't find any go out 1 mile. this will give you a more accurate value. 4. also contact the buyers for those properties that have sold in that area for cash. those are your investors. ask them if they are looking for more cash deals in that area.

And figure out what you want out of the deal. 

The ARV, after repair value, minus the repairs minus "costs" ( closing cost, end buyer profit if wholesaling, holding costs etc.) minus YOUR desired profit equals your max allowable offer, MAO. IF what the seller wants fits under that number it is a deal. The BP wholesale calculator is really good to work these numbers.

I struggle with getting caught up in what the seller wants. You need to know that obviously. However, we have to focus in what we want and if the numbers don’t work, thank them and move on. Then follow up in a month and see if their numbers have changed.