Is this a good Subject 2 Deal ? - Posted by John

Real Estate Investing
1

Posted by Randy (SD) on March 31, 2005 at 18:24:53:

John,

Where is the property located?
Here is a link to the 2005 fair market rents as published by HUD, and the county level data file is a Excel spreadsheet if you don’t have Excel on your computer the other to schedule B-1 and B-2 are PDF files. I suggest you compare the market rents in the area where the property is located.

http://www.huduser.org/datasets/FMR/FMR2005F/index.html

good luck

Randy
p.s. I tried to e-mail this to you, but you’re using a bogus e-mail address.

2

Is this a good Subject 2 Deal ? - Posted by John

Posted by John on March 31, 2005 at 16:00:47:

House ARV: 140,000 (based on appraisal from last year)
Mortgage: 112,000
Payment: 1,002/mo. PITI
Repairs: 2,000 (mostly minor cosmetics)

Equity: 28,000

House is 2 story, 3 br/2.5, 20 yrs old, needs no repairs - just carpet paint and minor cosmetics.

Seller just married and wants to get rid of house asap.
She wanted 10,000 from sale of house.

Offer I made to seller:

Take over payments subject 2 existing financing & give her $4,000 WHEN I sell the house (which I told her could be upto 3 years)

I plan to L/O the house to T/B for 1,050/mo , then sell it for 150k.

What do you think?

3

Re: Is this a good Subject 2 Deal ? - Posted by Randy (SD)

Posted by Randy (SD) on March 31, 2005 at 16:25:23:

did she accept your offer? if so…it’s a good deal

4

Yes - Posted by John

Posted by John on March 31, 2005 at 16:58:42:

Yes - she did accept my offer over the phone.

I am going tomorrow to sign it up.

I am just kinda afraid I won’t be able to get much CASH FLOW out of it.

5

Whoa…wait a minute - Posted by Randy (SD)

Posted by Randy (SD) on March 31, 2005 at 17:08:45:

Sorry I did not see your intended L/O payment amount, you have an underlying mortgage payment of $1002 and you expect to lease option that at $1050 I retract my earlier statement, $48 per month positive cash flow is not a good deal, it’s a foreclosure in embryo unless you have the reserves when you’re T/B defaults, I would pass unless you can pull a minimum $1200 L/O payment.

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Re: Whoa…wait a minute - Posted by john

Posted by john on March 31, 2005 at 17:54:45:

Hmmm…well, I will try to rent it for 1100/mo, but I fear that is just wishful thinking.

I may just put this deal under contract and assign to another investor who has cash reserves