All Forum Posts by: Schnell Manson

Babiak

Straight to the point lol. I know we cant save them all.

Thanks for taking the time to respond Gibbons.

Best Value ARV is $45K, how do you arrive at this? Comps, guess work?

**Comps

What would any one buy something almost 2X value?

**Not sure at this time. Just trying to pick the brains of some experts to see if there are any options that I am not aware of. I happened upon this while searching for deals to wholesale to investors. I know some people wholesale "lease option" deals and I was wondering there was anyway to make it work for the seller, investor, and end buyer. If not, I will advise the seller to look into the short sale option.

@Schnell MansonLease Option Assignments are for buying at retial, not almost 2X.

**I agree, although in some cases Lease options are still useful if the purchase price is a little above retail AND there is good reason to believe the property value may rise significantly. In this situation I dont believe it will reach that value within the next few years due to the amount of foreclosures in the area.

How did owner get into this position in the 1st place? a second mortgage?

**The owner purchased the home before the market dropped. Even at the current estimated ARV the property cash flows as long as they have a tenant. The issue is, their tenant recently moved out and they do not have the funds to repair and hold for 1 to 2 months while locating a tenant due to a significant pay decrease at their job.

FYI, no bank would do a short sale at 200% of value. Would you?

**From my experience when a bank does a shor tsale it can be approximately 70% to 85% of value (of course these percentages change based on several circumstances). If they are able to get the bank to accept a short sale it will definitely be a more attractive deal.

Based on the information received so far my original assumption is correct. I just wanted to see if anyone knew of any creative ways to make something like this work. Any responses, suggestions etc are greatly appreciated.

Jenkins & Larry Thanks for your responses.

Before the market crashed the ARV would have been more in line with the $115 to $120k that you mentioned. But I based my ARV on comparable properties that have sold in the area recently. Should I calculate my ARV differently?

Jenkins, we are going to research the short sale op

I am new to REI and I have found a motivated seller but I am not sure if the numbers work.

It is a 3 bedroom 2 bath 1,565 sq ft house built in 1976. The seller owes $85k on the mortgage but the after repair value is only about $45k. The house needs some cosmetic repairs ($3k to $5k). Their monthly payment is $688. They previously had a tenant paying $900 (person moved out in July).

Given the numbers above, is a lease purchase option feasible with an investor? If so, how do I setup the contract? This would be an assignment transaction.

Any guidance is appreciated.