Builer Friend W/possible Sub2
Ok i am a noob and I am wondering if this will work.
I have a friend in town that is a builder/general contractor. He finished a house a couple of months ago and is having problems selling it. He would like to get it gone so he can move on with his building business. The house is in a great neighborhood, good schools and close to shopping etc. He ownes the house f/c I believe. The bank where he got the money to build it may have a lien on it I will have to check this out. The home was apprased at 250k he has it listed at 245k. Could I offer him say 200k if he would take it and do a sub2. Structure the deal as to give nothing down and a ballon when I find a buyer? This way it would get him out of the house so he could move on to building another and I could make a few $ in the process. So what do the pro's think about this? 8-)
[ Edited by DFlo on Date 04/01/2004 ][ Edited by DFlo on Date 04/01/2004 ]
A few questions/remarks on this. First, does he own it "free and clear" or not? Free and clear means no liens/loans, etc on the property, and if so, then no "subject to" because there is no mortgage/loan. If there is a loan, you need to know what kind of loan it is. Likely, it's a construction loan and that would not lend itself well to subject to investing.
Forget about what it "appraised" for and find out what it is really worth. What have other, similiar homes in the area actually sold for and how long did it take them to sell? Are there other new constructions in the neighborhood? If so, you may be competing against other builders to sell.
Another key point, why is he having trouble selling and what will you do to not have that same trouble? Don't buy other people's problems unless you know how you're going to fix them.
Finally, and most importantly, is he motivated enough at this time to really consider a "creative" offer. As a builder, he is very conventional thinking. It will probably take some convincing for him to get used to the idea. No sense in even trying if he isn't motivated enough to even listen.
Roger