Need Some Help On A Subject To Deal
Currently I have a lady who is very
very very motivated to sale her 2 bed 1 bath house... The house did have some work.. Like painting exterior,
interior paint, Windows, Carpet, Possible some foundation, (It is a peer and Beam house) and does need to be updated with Heating and Air Condition.. I was trying to find out
what you thought about this... The lady owes about $44,000.00 and her monthly payments are 429.00 mo. including
insurance and Taxes her interest rate is 8.25% .. The properties in the area would sale for 50,000.00 to 58,000.00
The properties would rent for on Section 8 for about $689-$791.00... She is actual begging me to take it....
This is what I was thinking of as a exit Stragey.....
1 I could Do a Contract for Deed for a higher intrest... Make the Purchase price for what she owes... $10.00 Consideration.... I could have her to Deed to property in the Land Trust and then sign her Beneficial intrest over to my company
Then I could Lease Option it to a teant buyer for Option money of $800.00 to $2,000.00 with a payment of 695.00-
795.00 mo
Purchase price of 68,000.00 credit 50% of the mo payments to the down payment....
or sense I have the Deed, See if the house would qulify for Section 8
Rent it own Section 8 for the highest amount possible and take a cash flow
The only problem I think about is some of the repairs that need to be made..... But what do you think about this 
Walk. You are paying approx 80% of value. The repairs you listed are for a home that you can purchase at 50-55% of value. The lady is motivated because she has a problem and wants some newbie to take on the problem. If you like to rehab and sell properties at cost plus repairs, with zero profit, then try it.
I have rehabbed over 72 properties and I made the same mistake on a few of them. Be careful. It looks like it can be done on paper, but how people or homes are for sale in the area? Do homes in the area sell fast? Etc.
Good Luck
Chuck
One other option is to get permission from the lady to talk to the bank. Try to arrange a short-sale of the mortgage. Bank usually wont do it unless the loan is in foreclosure, but they may arrange a mortgage discount if you prove her financial distress and show that the home is also in distress and cannot be quickly sold near market value.
Worth a couple of calls.
Good Luck.
Why walk?
It doesn't sound like she has alot into the house.
Buy it Sub-to.
Insurance, taxes, and interest is only $429????
I'm going to guess she bought it for $50K or so. So that give her 6K equity, knock that down as low as you can.
Say you can get the house for $1,000 down.
Turn around and sell it for $50K at 11% no qual. and $6K down.
If I figure right that'll give you $5K up front, $576 a mo payment ($147 in pocket) depending on what the tax is maybe more maybe less. In two year buyer refi so you have an extra $6K
All in all $15K in your pocket.
Only thing that could be a problem is the heating and AC...
See if she can refi at a lower interest rate for what it would take to fix the heating and ac add $5K+ on the back end and pad teh payments with and extra 2-4% interest.
it has a chance of working, just sit down and work the numbers.
I would just offer $500 for her to walk and get the house Sub2. If she balks and wants more money for her house then setup note for the agreed amount over a 5 year period at 1% interest.
If I have to make significant repairs then I try to get in for as cheap as possible.
The Purchase-option will only work if the house is in a nice condition or no one will be motivated to buy the house unless they're a rehabber, and rehabbers don't lease option, they BUY outright and fix, so you either need to fix the places cosmetics up and fondations (get a quote, don't get too deep, it might be a lemon). Do this fix before you ever consider finding a tenant buyer...
In my neck of the woods I come across many well not rehabbers but moonlighters that jump at lease option and want to do repairs. I must agree to there repairs. mostly they pay rent and live without all they had dreamed to do