Evidently I put too much info in my subject lines and limit my audience ;)... - Posted by Anthony-OH

Real Estate Investing
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Posted by Anthony - OH on August 17, 2000 at 09:16:38:

NT

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Evidently I put too much info in my subject lines and limit my audience ;)… - Posted by Anthony-OH

Posted by Anthony-OH on August 17, 2000 at 08:51:43:

I am curious, how do I place a valuation on these no-equity pre-foreclosures? This is the opposite of doing a flip where you buy low and sell low. This is buy high (finance high on someone elses credit), finance higher (via L/O or L/C). Lets say:

FMV=105k
Equity~5k (assuming 5% down)
Arrearage~5k

At what point do I say that the arrearage is just too much? Or do I just get the deed and try to get the arrearage $$ from a T/B as option consideration?

OK so here is my formula…
If arrearage less than 5% of FMV (What I could get for Option Consideration) then YES
If the equity is greater than the difference in arrearage. then Yes
If the arrearage is more than 5% and the arrearage is greater than the equity. Then No

Profit: This way I’m entering into the deal with no money and I make the difference in payments + backend sale as profit.

Risk: I risk the T/B tearing up the house to the point I can’t fix it (or it isn’t worth fixing) and having to deed it back to the bank or sell it “Subject To” to an investor.(Worst Case/Last Resort)

Please poke holes in all this.

Thanks

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Re: Evidently I put too much info in my subject lines and limit my audience ;)… - Posted by dewCO

Posted by dewCO on August 17, 2000 at 20:50:21:

It looks like basically you’re on the right track. You need to assess what its worth now, how much you’ll put into it to get it (arrears) and what you can do with what you have left. LO, seller finance, flip.

If the seller is in BK I’d make the contract contingent on getting the property removed from the BK before I did nay work on it. You can’t take over a property when the seller is in BK. The court is in charge then, not the seller, until and if the court releases the property from BK (get a copy of the written order, to make sure it’s for real).