Curious about a deal - Posted by Geoffrey Faivre-Malloy
Posted by Geoffrey Faivre-Malloy on December 09, 2000 at 14:05:59:
First off, I don’t think this is a motivated seller so I’m going to pass on this one. HOWEVER, I wanted to run it past you guys to see if there might be ways to structure this to be profitable. On to the figures.
There is a property that I’ve looked at. The house on the property would require about $20,000 worth of repairs. It’s a small home (3/1) with about 1200sq feet.
The asking price is $137,000. The ARV (based on comps within the past 18 months) is $150,000.
The current owner has the property free and clear and bought it from the previous owners 3 years ago. He bought it as a fixer upper but no longer lives in the same state. he comes back to the property every 3 months or so and does work on it for about 10 days.
Now, he said “I don’t need to sell this property” BUT not 30 seconds after saying that, he said “I’m asking $137,000 for it but would go to $127,000 if the buyer paid closing costs”. He also said he was flexible on the financing so he might be open to a lease/option or some other type of owner financing.
Now, I figured that my MAO is about $85,000 (150,000 ARV * .70 - 20000).
The property has 1.20 acres on it and it would be possible to subdivide the lot. The seller seems to think that the land is worth a lot and kept mentioning if someone didn’t like the house they could tear it down.
The seller also mentioned someone could come in and put a short street down the property and put a few townhouses in a cul-de-sac on it.
I plan on passing this one by to give the seller some more time to be motivated but I was wondering if anyone sees something that I don’t in what I’ve just described.