Offline1st deal is a short sale for 80,000 the current loan is 270,000. This is my friends home and he wants to let the home go and move into something bigger for the same price at 270,000-285,000. Should I buy the bigger home or buy the smaller home. The bigger home once had a loan of 550,000.
2nd Deal is a foreclosure and they want 120,000 with a 15,000 second loan to fix it up. But the house already has a value of 200,000. What to do? Please help DG folks. Thanks
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Luis Villalta
(323) 841-4480
Have you run any numbers so far? The first thing I would do is get comps in the area. The fact that they had a loan for XXX amount does not place a value on the property. I have seen properties foreclosed on with a loan of $500,000.00 and a value of $250,000.00 Do your homework first.
In addition to gathering comps to determine fair market value, how are you going to get out of the deal? What do you want to do with the property? The larger home might be harder for most people to qualify for, thus you will be sitting with it for a while!! Where as the less expensive and smaller home might be able to move a lot faster, because a lot more people can qualify for it!! I would take a look at repair costs, cost to borrow money, and your holding costs on both in comparison to the DOM for both properties and then decide on which one is the better deal.
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