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I could use some help. - http://www.dealmakerscafe.com Forums

Original message

Don

"I could use some help." , Thu 7 Dec 20:48

I sure could use some help on this one.

Here's the deal:

Couple getting divorced. 3br/2ba 5years old.

100,000 ARV
80,000 Owed
5,000 Repairs (Seller said they would repair prior to closing.
795 PI payment
11.00% She didn't know here rate but I guessed it at 11%

I took this house "subject to" I did not give her anything except for a $10 ernest money check...

Here comes the kicker....I just found out TODAY that they have a 15,000 2nd on the house. with a payment of $365.

795 1st
365 2nd
91 TI
1251 Total monthly expense.

It's scary when I put these numbers on the paper like this but does anybody see where I can possible make money on this deal??? I hate to let a "Subject to" deal go south...

Alpharetta Ga

Replies:

wgreau

"Re(1):I could use some help." , Fri 8 Dec 15:35

Don: I would follow Lynn's suggestions, of course. I only wanted to mention that I had one with two mortgages on it and I stewed over it as you are. I offered to buy it subject to the first but not the second, he would have to take care of that one.
I was surprised when he accepted it. The deal later went down the tubes, thanks to his attorney. I look back and am glad for the learning experience I gained. Point is...you never really know what they will accept unless you make the offer.
This one would scare me (at this point in my business) because it is borderline and if I had to hold it for awhile it would kill me.

William Columbus OH

Lynn
Moderator

"Re(1):I could use some help." , Thu 7 Dec 21:36

Don,

You and I spoke about this house and I have serious doubts about houses in that area being worth 100K. Are you sure on the value?

Does the $80K owed include the 2nd mortgage?

Having experience in that city I can also tell you that you will "never" get anywhere close to $1,251 per month.

If the values are correct than you may be able to get it under contract for $80 and sell it outright quickly for $85 or $90, but I wouldn't buy it subject-to.

Keep searching!

Lynn

BenTN

"Re(1):I could use some help." , Thu 7 Dec 20:59

Don,

If the area can afford the payment (by that I mean is the rent on comparable homes in that range?), then you are ok! I still would do my due diligence and maybe get the seller to pay the next 6 payments on the second....I don't know their motivation factors but if they are high...then the ball was and still is in your court.

If ya don't like it...extend your time to purchase and run some tester ads....I do this alot on really really big deals...ex/$400K with $3200 PITI's. But it will give you an idea of what you can expect, with very little cost......well I guess you do have that $10.00 dollars to consider losing also,(just kidding)

I hope the deal goes great for you!

Thank you

Ben