Posted by Benja on May 03, 2006 at 17:54:16:
Yes, I agree. Well, as a follow-up, I found out that the seller was looking to get $300K out of the deal AFTER all expenses were taken care of. Also, this property is a rental that they are looking to 1031 exchange for another rental property closer to where they live (this is an out-of-state owner) in about 6 months, so there isn’t much motivation. The house had $30K of remodeling done to it about 2 years ago, so it’s not a property that they couldn’t list and get close to what they’re looking for. Basically, there is no deal here, but the cool thing about talking to the seller is that this was the first time I actually had the opportunity to respond to someone off an ad of mine - great experience.
Free and Clear House - Posted by Benja
Posted by Benja on May 02, 2006 at 14:12:57:
I found an unlisted home via some advertising that I did; the home is a rental in a nice neighborhood (scale 1-5, it’s a 4). I have not seen the inside of the home, but the owner says that it doesn’t need any repairs. From the impression I get just seeing the home from the outside, it needs updating. The owner is looking to sell within the next 6 months and doesn’t want to wait for his equity.
Here are some details:
- Owner asking $300K and thinks it’s worth $300K, but solid comps show ARV is $340K
- Needs updating - I’d guess about $10K
- Looks structurally sound
- Not sure if rental agreement ends soon
Offers I’d make:
(1) All cash - $240K w/ exit being to wholesale to another investor for $15K to $20K
(2) $2K down and try to talk seller into $28K second carry, then get loan for $230K. Exit would be to lease/option at $320K for 1 year and let new buyer update it.
(3) All cash - $240K by getting a private investor loan or partnering. Exit would be to rehab and flip the property.
Any other possiblities? Did I leave out any details?
Re: Free and Clear House - Posted by Darren
Posted by Darren on May 03, 2006 at 15:46:59:
Yes, just one. What is the seller’s motivation level? He will laugh at your offer if he’s not pressed to sell.