Potential Deal..What would you do??

What is your buy price?
What is the rehab estimate?
What will the place rent for?
What will it actually SELL for in 45 days or less?

With that info we will have a better idea if it is a deal or not.

Michael Mangham
MD Home Acquisitions LLC

I have a meeting with her in a few hours and I will get some more accurate numbers.
I am just trying to find a plan of attack going intonthe meeting with the homeowner..
Thanks

Other than the fact she wants out of the home, what else does she want... $? Is there enough room in the house to make it a 2 and/or 3 Bdr.? What would a 1 Bdr. rent for there? How much would it cost to fixup now? Most buyers want 3 Bdr., 1Ba homes or larger, because of the different target market. You should also find out the comps of similar homes and go from there. These are some things you need to think about, after you see the house and determine your repair cost. Don't give her any offers of any kind yet, until after you see it. Check with property management companies, to see hat they think thyecould rent it for. Maybe you can get an average from a few similar rentals in the area. Location makes a difference, too.

These are only some suggestions. I hope they help you.

Have you thought about student housing?? Just putting ideas out there...Jan

Fort Collins is a big college town. Gotta be a market student housing!! Of course, like Michael says; purchase, rehab, rental numbers first.

Alright Fam,
I went by the house yesterday and the homeowner is trying to get out of her house, however, I tried to explain to her that she probably wont make out with much of a profit due to rehab costs, equity, etc. Owes 130k, house maybe comps to 160k, she wants 150k, it isnt going to happen. She then told be she wants to rehab it to then sale and I tried to explain to her that she will be in the house for more then its worth when plugging in repair costs.
Details...
Im assuming it needs about 10k to 15k, to get it up to par. There are walls inside that are not finished, could use some new tile, good paint job, finishing entry ways, I need to get further info on roof. It is possible to add an additional somehow but it would require some drastic renovations.
Her loan is about $850 a month at 4% interest rate. I told her some options, purchase, lease option, and subject to just to put some thoughts into her head for her to think about.
What Im Thinking....
Wrap it up in contract and try to get a contractor to assign it to with a lengthy inspection period.
Do a sandwich lease but I am a little concerned with the mortgage at $850, I feel that may be a little difficult to get someone in there for that price when renovations need to be done. I could tho still get a contractor in their that wants to fix it up.
Subject to but that doesnt sound very appealing to me on this house.
Or I could just walk away..
Tell me what you think fam, again this is decently close to the campus, there are some higher comps in the area but they are for bigger, updated homes.

Sredman after your first sentence I new you should walk away!!!!

You've got little to no wiggle room here. She wants 150k and comps are 160k with props that are ready to sell, plus not enough room at all to assign to a rehaber, Could be time to walk. More will come your way. I like how you pretty much had it figured that it wasn't doable. Hang in there...Jan

Thanks for all the info
Just a side note, the lady told me that her lot qualifies under multi family zoning for some reason...

Walking away. It's not a good deal from the get go. Could sell for 160, wants 150. The 15k for repairs already puts you out of money. If you could talk the seller into lowering the price off of that alone, that'd be good. But honestly, putting your money in when it's such a high percentage...With closing costs and other stuff like that, you wouldn't make enough to bother with it. And with this deal, you would lost money.

no deal there
Mike

What if I can get her to sell me the property for 130k, do you all think I can work with that???
Thanks for all the advise.

i know you already talked to her but get all the info you can on why she is selling and if she has other properties that she has a mortgage on or does she want to move .if you can get it for what she owes then maybe a subject to... but is the owe price actually what is owed,i know sometimes sellers like to think what is owed is actually less than what is REALLY OWED.This info you would have to verify.No matter what you have to find a buyer or renter to make up the difference in all the expenses plus make a profit.....as you know. so that said have you developed a buyers list of any kind???? do you have ANYONE on the line looking for something in the area and what can they afford???
i like to have someone in the shadow that can aford2-300 more than what this deal is going to cost me.
who knows maybe she wants out more than you know...hence going back to talk and LISTENING to those magic buttons.
REMEMBER ...peoples wants and needs change every day and these are just my opinions.
good luck with this and 90 % of the time these deals sound bad and prob are but 10 % COULD be a potential deal if you uncover that magic button !!!
would she consider making 100 per mnth for a yr just to get rid of it ??????/ dont know till you ask after listening
food for thought
jay

Don't know your sellers exact situation, but we have to remember they sometimes have very unrealistic expectations. Or sometimes like a drowning person that even if you dive in to help them, in there desperation will have no second thoughts to trying to pull you under to keep themselves elevated.

You just have to access what you are going to do with it. Multiple strategies will work in any market, location, property ONLY IF you have a buyer for that. Or we can become the drowning person if we don't know our exits. Have a backup to your backup. If you can't then don't negatively expose yourself. Even if you got this property for $100-110-120k (whatever it is). If YOU aren't able to fund it, rehab it yourself, etc. and DON'T have a buyer for it...it still want put money in your pocket.

You said $850 mo, if you pulled a min. of $200 on it, the kicker is: CAN you get someone to pay you a MIN of $1,050??? for the property? Or do you have a rehabber/buyer looking for that neighborhood and does he only require a very minimum spread?

Great job on taking action and getting out there! Your marketing and efforts are working. They drove you this lead! I also hear you throwing alot of terms, strategies out there, but would strongly encourage you to re-study how to access the deal, run the numbers, estimates, etc. That can help to narrow which strategy will work and which will not apply to that specific deal. It's very evident you are gaining the RE knowledge and are in the game! Heck we all learn something everyday and with every deal.
Keep on keeping on!

God Bless,
Jen

Thanks for all the info, I will keep you all informed