Mary,
Get some info that gives you a little more certainty as to the figure the property will appraise at. The Realtor you mentioned should be able to pull some comps for you. A margin of $10000 leaves too much room for error.
Once you have the numbers then see if they work for you. If you just want to sell to another investor without doing any of the repairs I would do as Steve Cook did initially (see his chat transcript)there were deals in which he only made $1000. Well, it’s more than you get for doing nothing so if you sign a bunch of papers for a property a realtor brought to you I would settle for “a bird in hand”.
Posted by mary Omolo on July 20, 2001 at 07:58:49:
I have tied up a deal with $75 back out clause and put up $500 earnest money if I buy it.
The price is $61,000 the tax appraised value is $73,800. It just needs paint and the neighborhood looks to be in the $80’s the realtor said I could sell it for $79,000. It can probably appraise in the high $80’s.
I put ads in the paper for $66K cash so I could sell my contract or for $78,000 if they need financing. I have 30 days to close or 10 days from 7/19 to walk away and lose $75.
Is it worth getting a Hard Money loan is my question? I’m in Arlington, Texas. I don’t have the $61,000 cash, but have some money. Thanks for your time, please answer before the 10 days are up.
Mary:
Sounds to me you are playing Russian Roelette with all the chambers loaded.
10 days is really a short time. What is the average market time in your area for homes listed at market value? I would think if you were going to tie up a sale that you would have contacts lined up willing to buy your contracts. Do you know any Mortgage brokers? They may have a list of individuals looking for this type deal. However, if I was one I may want more details ie the owners name existing financing etc,etc. I might even let you eat the $75.00 and buy up the property at what you offered to the seller and save my self 5k (make 5k more on the deal).
If tie up a sale like this try to get more than 10 days. Get at least the average market time for your area. With a lot of homes on the market in my area (albuquerque, NM) Average market time has gone from 60 days to 90-120 days.
Good Luck.
We’ll watch for your posting to see if you found a buyer for your contract.