Newbie...What To Do...Please HELP! :)
This is my first chance at a deal and I am looking for advice. Here are the details:
1 payment behind on the mortgage
3 beds, 2.5 baths, full unfinished basement
purchased in 1996 (new) for 187,000
2240 square feet
11.57 acres
has 0.25 acre pond
in the county of fulton, indiana
appraised at 225,000 3 years ago
wife lost job in february and can't afford the house anymore. wants to get out before he gets in any deeper.
he owes 200,000 on the property
haven't seen the house yet...but he sent pictures and it's in great shape (could use some new carpet in a few rooms and a paint job, but that's it)
what should i do with this one? any advice would greatly be appreciated. i was thinking of maybe selling this one subject to and finding a buyer for it. the only problem is that it's in a rural area and i am worried that i won't be able to find a buyer quick enough (i don't have a lot of cash reserves to be paying the mortgage until i do). also, i have downloaded all forms in the "free forms" section on this website and none are labeled "subject to agreement." any help with this? is it called something else? also, i am having trouble finding comparable properties for sale in the area (it's a rural area). either i am finding matches for the house, but not the amount of land that it sits on. any help on how to go about this would be greatly appreciated. thanks guys! this board is great...i've learned a lot for it already.
brian
sorry...i was thinking about "buying" this one subject to. the seller is possibly interested in doing owner financing.
This is not what you probably want to hear, but if you can't afford mortgage payments, and you can't find good comps, then I would pass on it. There will be others.
I agree with Chris. If you do not have the cash reserves to wait out a buyer, then you definitely shouldn't do the deal.
However, I would verify my assumptions before completely walking away (e.g., verify the demand or lack of it, etc.). Actually, rather than walking away, I would see if there is another investor interested in the deal (local REI club) and see if you can pick up a finder's fee.
I can't help you with the comps. Here in my neck of the woods we have a lot of tract homes and it seems some people enjoy paying 750K for a large house that basically has a mote for a yard (i.e., the house takes up the whole lot).
Hello,
I think you may want to drop this one and move on to another. The spread is not that large (sounds like around 25K) and you don't have enough data on the property to know or accurately estimate the market value. You also sounded unsure as to being able to afford the payments should you need to make a couple.
I recommend waiting and doing more research into 'Subject To' REI.
Take care,
Luke
How would the property be as a rental? Is the rental market strong in the area? A buy and hold may be possible here. For me, when a seller is that motivated, its really hard to pass up. You could walk out of this deal with some money and the asset. Getting the house appraised may be worth it. If it comes in with more equity than you thought, you can overfinance a little and pull some cash out and then rent it or lease/option it according to future value. Strength of the rental market and the comps are very important though. If you're willing to spend a little time and money, you could still make it a worthwhile transaction.
Since I haven't done a deal yet just take my advice as that...not that great. But what about this guys, what if he got an exclusive option to buy the house for like 15-30 days so at least the house is tied up and try to find an investor to flip the house to or at least give him some time (without obligation) to work out some kind of deal? Would that be any good?
I don't know what you all are thinking but we have a great deal potentially. However we don't have enough information.
We need to first figure out our exit strategy. Is this property a good rental, rehab project, lease/option, etc.
Once you figure out what you want to do with the property, you will know more about how you must get into this. Cash reserves may be a problem but it may not be also. There is a lot to consider and we don't have enough information to guide you along sucessfully.
Don't stick around on deals that aren't good but its not over til its over and, my friend, we have not yet begun. GIve it some thought and get back to us.
I'll likely not visit this post again so PM me with a note to return and respond if you'd like. Good luck!
I agree with frogger, sounds like a lot of potential, but not enough info to make a sound decision. Need more info. Also, if the owner is only 1 payment behind, why the motivation to sell so quickly? I would find out what their motivation is. You need to know as much as possible before you walk away from this one! Good luck