Suggestions for handling this foreclosure?
Take the following scenario and please offer suggestions or advice - round numbers used for the sake of brevity:
Found a foreclosure but was not able to do anything with it before it became REO. Walked thru it, some minor things, probably $5-6k in rehabs. This house is comparable to others in its area, even a little more, comps around $240k.
Some minor back taxes, title is clear, bank has it on their books for around $164k. Bank is insisting on "standard contract", which among other things states that it cannot be reassigned without seller's permission (would that be the bank?). Turned on to the property by a realtor who is going to expect his 3% commission. Contract states that buyer pays closing costs, or closing costs can be split, although realtor sez this bank "almost always" has closing costs paid entirely by buyer, and he fully expects the bank to be firm about asking about $3-4k more than what it's on their books for.
Am contemplating the following:
* Start offer at $165k cash, "walk max" is $171k.
* Seller pays closing or we split it, will NOT pay it all myself.
* Am thinking I could flip it, perhaps do a double closing, offering an investor 20%+ and still keeping a decent amount of money in my own pocket.
Now in addition, the bank wants a minimum of $1k deposit with the contract, which means that between the deposit and closing, I'm potentially out of pocket to the tune of around $4-5k. Yes, I'll get that back after the second/double closing, but I just don't have it! In fact, I don't even have the $1k deposit.
On one hand, I could walk. Contract even says I can walk if "partner doesn't approve" or financing cannot be obtained. Then I could look for the next one, where the deposit would be something I could handle. I know I can pay the realtor's commission *after* the second closing, so don't need to come up with that upfront.
Or should I just keep looking and pass on this one? Looking for thoughts, opinions, suggestions -- have been doing a lot of reading and research and finally decided it was time to DO IT instead of sitting around THINKING about doing it.
Thanks for any/all feedback.
Find an investor who has the cash and partner with him/her. Offer 50/50 split to make it attractive.