I was contacted by a motivated seller who is in trouble and wants to be done with this property. She hired u build it to build her dream house and due to under budgeting she started out in the hole 25k. The house has been sitting incomplete for a year because she’s still waiting for a 2nd loan to close to complete the home but now they have delayed closing until Feb because they want to wait for her tax info. Because of the delay she hasn't been able to pay the contractors. There is now 80k in contractor liens on the property and the current amount due at the bank is 414k - it’s a construction loan so she’s only been paying the interest. One contractor has already taken her to small claims. The appraised value is 520k and it looks like it will cost around 50k to complete the home - it’s 95% completed.
This seems really complicated and would like any advice I can get. I don’t have it under contract yet because I’m trying to figure out if it’s a good deal - the liens are throwing me off..
It does sound a little complicated, and if you're an inexperienced newbie, this may not the best candidate for your 1st deal. That being said, liens can often be negotiated for much less than face value and the bank may accept a Short Sale. A lot of work & time spent.
Even if you don't get the deal, it'd be a good learning experience if you have a lot of time.