Too good to be true???
I am looking at making an offer on a preforeclosure going to auction on April 11. Owner states he has a current appraisal for $815k, the 1st balance is 420k, 2nd is 20k, and he is 60k in arrears with the 1st, 9k in fines. He would like to get 50k out for himself.
Please check my math, but if I offer him 500k doesn't that satisfy the above? The 6ok in back pmts, isn't that included in the 420k owed to the first.
He purchased the property in July, 2001 for 335k. He stated he did 65k in repairs to it. He has turned it into a transitional home/ shelter. Could this be the reason it appraised so high? He stated he was receiving 40k per month from the state to run the home, but he was accused of abusing a minor there and lost his funding. He said he filed a counter suit and is believing he will be receiving a settlement out of court in 60 days (after auction). One comp .34 miles away sold for 1,085,00.00. This is a nice area in Seattle.
Why would he only want 50k out of it? He said he would probably accept the offer today. What am I missing? I will ask for the appraisal, and definately require title search. What should I put in the additional terms in the purchase and sales aggreement?
Of course I will be desperately trying to get investors aboard financially.
Any comments or suggestions are very appreciated.
Shannon
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