I do not like to promise someone that I will close when I know I can not or will not. 80% is above the mark for paying cash yourself and staying in the game for the long haul. For someone that wants to buy and hold they may think it a good deal.
You should have some concern about the tenant and how long the contract is for. If you try to resell as a rental you cut down your market significantly. These are the guys that make offers of 60% for cash. If the tenant’s term is up you can try for a retail buyer. I would expect to have to spend money for paint and carpet. You would have a clause in the contract that the escrow money is the sole recourse for non performance. Or you can do a recordable option.
Okay, what do the pros do with houses they can get at 80% of FMV, but the Seller won’t do anything creative and won’t hold a note? He lives out of state and just wants to be paid off.
I’m not real interested in holding onto this property and would prefer to make some quick cash or cash/hold a note.
Can I…
A. Get it under contract and just shop the contract?
B. Get it under contract, advertise to sell w/ owner financing, sell the note at closing (simultaneous close)
I know, what are the numbers…here they are:
FMV = $120k
Offer = $95k
Payoff= $65k (not all that relevant since Seller doesn’t want anything to do with the property or another note)
Sec 8 tenant occupied, ok’d by the county in the past 3 or 4 months