Kevin,
Do you know a local appraiser? If so ask them to give you an estimate of value, maybe even pay them for it. If the numbers jive, give the woman her asking price, and tell her the only way to pay off the equity loan is for her to create a new mortgage, sell it at the table (at a discount of course), the proceeds will payoff the equity loan and she gets the difference. Everyone wins. Then you can rent it, sell it on a wrap, fix it and sell it retail etc… (what ever your exit strategies happen to be). Best of luck to you!
Posted by Kevin Subbert on June 25, 2001 at 22:45:26:
Got a potential deal that is giving me a hard time. The house is nice. 4 bed 2 bath and all that. Anyway, the seller just wants out. She is a widow who owes 29K on a home equity loan that has moved its way into the 1st position. She wants 80k but will carry the balance after the lein is paid. the house needs work, about 15k.
Problem- Cant get comps on this thing. It was built in '70 and all the houses on that street are on 1 acre lots, very rare indeed for the area. All the other surrounding houses are newer, Id say at no more than 5 years old. The whole area aside from her street is sub-divisions. They are selling for 200-300K.
The seller told me that there hasnt been a house for sale on her street for 2.5 years and that house sold for 125K. I tried to pull comps, went back 2 years and there was only 1 house on that street that sold and it sold for 250K. the problem is, is that all these houses are custom built. I havent seen the house that sold for 250K but Im sure its very nice.
I looked up the sellers house on the tax roles and its appraised for 120k.
Im guessing that none of the houses on that street are going up for sale because of the lot size. And they really are decent looking houses.
Needless to say Im going to buy this thing but really would like to get a better idea of what its worth. Im estimating 130-140K.
Also, Im not sure if she is gonna go for carrying a 50K loan in the 2nd position. I dont suppose there is any chance of getting the 1st lein holder to re-subordinate?