How To Handle This Deal... Possible SS?
We got a response from a seller;
The details;
Assessed value of the house: 91k
Comps coming at about :100k
Total payoff : 55k
Repairs: Paint(interior and exterios), leak in one of the roof can be fixed by patching the roof), cabinets in the kitchen to be fixed (don't close properly and are old), carpet. I am estimating repairs to be around 15k.
Will be taking a contractor to estimate the cost soon.
The owner filed for bankruptcy and was dismissed and is scheduled to be foreclosed in November.
The owner is asking 68k., i.e. 55k payoff and 13k for him. He says that if he cannot get 13k he will file ch 13 again and delay the sale. He wants to protect his credit.
According to me there is no deal here if I pay 68k for the house; My goal is to wholesale the property quickly as long as I get atleast 3k. My calculations;
House 68k
Closing cost : 2k
Repair - 15k
Holding and selling cost: 5k
That is coming to about 90k. Am I missing any other expense?
My question : Is a SS possible? I haven't asked the home owner if he would co-operate with us in the SS, but with his situation I am sure he will.
Any suggestion to structure this deal for a win-win situation is very welcome.
Pl. advice.
Thanks in advance
With 55K in payoff and 100k comps I don't see a short sale here, especially on the first. Also why would you think the owner would go for SS, sounds like he thinks there is equity, and wants some money out of it. With short sale he wouldn't get anything. It's interesting that the owner says that he wants to protect his credit, yet plans to file bankruptcy.
Maybe you could negotiate him down from 13k and flip the house as is, without repairs.
Yes this is definatly not a short sale candidate. The payoff is too low. If you were a banker, wouldn't you feel pretty secure in getting back a $100,000 house when you only have $55,000 in it??
Frankly the area where you need to work on is the seller. You should find out why the seller thinks he needs $13k and what he is going to use it for. IF the seller is modivated, the issue won't be that he wants money but rather has a problem that needs solved.
Don't buy a house--solve a problem. Only if you solve peoples' problems will you buy a house.
GOOD LUCK