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What Would Be Your Entry/exit Strategy For These Two Deals

#1 User is offline   verbatim 

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Posted 10 February 2009 - 03:55 PM

deal 1: owner will sell for 86k [loan balance] comps at 130/140k needs 4k in repairs for rotten wood around window sills.- note is 1k/month. It has been empty for one year and note is current. He says they are moving out of state as well but later made contradictory statements. I basically believe he doesnt want to put the time into repairs & listing it.

86/135=63.7% ltv

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deal 2: duplex - owner will sell for 200k [loan balance] comps at 245k - needs no repairs - note is 1800/month - tenant is paying 1k per month and owner boyfriend pays $800. The current tenants lease is up in June.

Owner will sell to me now and rent until they relocate out of state in June. She says her side will rent for 1250 so should i rent it to her for 1k for a $200 profit or the full $1250 until June?

She is thinking about not paying any more notes for the next 6 months and using that money elsewhere if she doesnt find a buyer.

200/245=81.63% ltv

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I was thinking sub2 entry method as both owners may dissapear.

Exit for the 1st can be cfd w/10% down, l/o with 3% down [but may still need repairs so tenant can qualify for loan] or i can fix & sell myself.

Exit for 2nd can be to rent both sides and keep the $300 or $400 cashflow and keep my fingers crossed that both tenants do not become additions to the daily growing list of unemployed individuals in this country. I dont really want to be a landlord though which is why this is not really an attractive option for me unless someone can show me the benifit.


Since there is a strong chance that i have missed something regarding the best way to get in and out of these deals i would love to know what other investors would do...

Thanks
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#2 User is offline   WeBuyHousesInGA 

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Posted 16 February 2009 - 07:06 AM

Deal 1:
Entry: Walk in the door and offer $60k.
Exit: If he balks, walk.

You've likely got more than $4k in repairs when you've got a house with rotten window sills that has been empty for a year.

Not only does he not want to do repairs, he's tried to get $86k elsewhere and failed.

Deal 2:
Entry: Don't bother.
Exit: Yes. Quickly.

There's no deal here I don't care how hard you cross your fingers. This is not a market to be paying 82 cents on the dollar for a breakeven cash flow rental.


Sub2 entry?!? Wrong market. This is an REO market. Banks are unloading REO property for 40 cents on the dollar. Why are you wasting time on deals like this?
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