What's Your Take?
Ok, let me just say I'm a super Newbie, I've read alot on this website, and a book or two. Not actually looking to do a deal just yet, but I am sticking my toes in the water just by going through the paper and calling FSBO's and just talking to them. Only for the practice. I figure I'll post some of those calls on this website and see what some of you guys think. Here's an ad I called today:
Historic 2 story 3 bdrm 2ba Needs Work.$70,000.
Now, I know it is in the less desirable section of a very desirable neighborhood and homes in this area typically sell for around 150,000 and up.
Ok, I called the gentleman and this is what I find out. He bought the home 4 years ago with his son. His son was supposed to fix it up, but never did. His son is now moving out and leaving the father holding the bag. I got the impression he's pretty ticked off at the son. Anyway, the son has even lost the keys to the house, but if I drive by it and want to see the inside, the garage door is unlocked go on in and have a look. It's currently empty and unkept on the outside, and he did say that it looks better on the inside than it does on the outside but the floors on the first floor were 'spongy' (whatever that means).
He's asking 70,000. The insurance company has it insured for 120,000 as it sits. Says it needs work, but I'd just have to look at it to see. Says he knows fixed up it would bring at least twice what he's askin, but he's too old and not interested in foolin with it. But with a little more talkin, I find out that the house sits next to a creek. (Bells, and whistles!) I ask if it has flood problems, and he says well, the insurance company makes him buy flood insurance and that runs 700-800 a year. (Maybe that accounts for the spongy floors!) House was built in the 1940's. I asked him if he had a mortgage on the house and he says yes, for a little less than his current asking price. It's my impression he's just wanting to get a little cash in his pocket and get out from under the prop.
Ok, my thought is yikes on the flood problem, there might be a workable deal here but the flooding thing would make me pass on this property without a look. I think it would be too hard to sell the house with this problem. Of course it probably wouldn't be that cheap other wise. Your thoughts?
Doesn't exactly sound like a good first deal if the floors are soft, it's next to a creek, and it's in a flood zone. I would pass.