Found another deal...I think - Posted by Randy -IL-

Posted by Randy -IL- on October 28, 1998 at 24:08:04:

Here is some stats:

Appraised value: $250,000
Sale price: $130,000 all cash

Property is a 5-7 office building with 3 bedroom apartment upstairs. Nearly 8000 SqFt total. An attached garage area is also included. I’ve got an idea to flip this one as I don’t live nearby. I only wonder why in the world someone would just kiss away $100k of equity. Perhaps the appraisal is way high or fluffed up.

Idea number 1: Tie it up with a purchase agreement or option. Advertise for sale with owner financing at 30 to 40k more than my cash price. Create a note for the purchase with me keeping the difference. Even with a lower appraisal and a discounted note I could walk away with 25k+. Sounds good to me. That amount would pull me completely out of debt (School loans, consumer debt, vehicle)

Idea number 2: If I purchase the building using my own sold note, then I would have much more time to sell it to my flip buyer. Which brings me to the next point-- May I structure my note to prepay 3 months of interest? I don’t have the cash to front for payments during the marketing time.

Now the pros get to tell me what I missed and need to think about.