What Would You Do?
A fellow called me about selling a house. He is recently divorced. Not sure if he's willing to sell subject to. Is it possible to structure a deal using a L/O where I can buy the house and pay the seller only what his monthly note is? Would that be considered owner financing?
The house is worth 62k and says he had it appraised for 69k. He owes 53k. Should I offer to give him what is owed? I would like to keep it as a rental.
thanks
I spoke to the seller again and he said he's willing to sell subject to.
He wants some money. He owes about $600 for 2003 taxes. The roof is stained really bad in the front. I haven't seen the inside yet, there's a tenant who's behind on the rent two months. The house is worth 65k What should I offer?
Hi Arborlis,
House APV $65K
Owner owes $53K + $600 back taxes
Renovation costs $ ?
Possibly eviction costs $ ?
Other costs (owed utility bills, cost to find new tenants, etc?)
Your profit margin $ ?
Add all your costs + profit margin and there's the final price you can offer to him.
It's very important to find out if he is behind on his mortgage payment, if there's a tax lien on the house, etc. You can help him get his payment up todate and settle his tax liens. Of course, all those costs will be taken out of the purchase price or rent.
Hope this helps.
The area the house is in is not in high demand. About 3- 6 to sell. I was considering renting it to a friend. The profit margin is a little low. This would be my first deal and I dont want to make it my last. The owner wants some money out of the deal also.
The margin is very slim. Paying sellers back taxes, past due payments, etc. and relieving him of all the grief should be enough. Good luck!
This isn't a bad deal here, do good title search and make sure there aren't too many rehab costs. I would buy this "subject to", put an ad in paper for "rent to Own" or Lease option. Then take 4 or 5K in option consideration money and lease for a year or two- keep mortgage in tact. Run the people who call the ad first through a mortgage broker to make sure you can get them financing in a year. after a year add 5% to price and sell for 72K.
Tenor is on the right track, take it subject to and set a 2 year out option price that is 10% higher than todays market price at least.
The seller gets money when the optionee comes through with his. There are other variables as well to this such as what is the FMV after repairs and you could have the owner pull money out through a refi/heloc which would give him some $ and you $ to make repairs.
You could also make a deal where he gets paid on the refinance a certain percentage of profit over and above "X",
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