So, is it a deal or not? What would YOU do?

Posted on 24. Aug, 2010 by in Real Estate Investing, Short Sale Investing, Subject To Investing, Wholesaling



So is it a deal or not? What would you do? Ok so I know what I am going to do with this property….remember the one that my past seller whom I did a sub2 deal with called me about recently?

I went to see his property last Saturday (I think that’s when it was.) Anyway, I know what I’m going to do with the deal for the most part so I wanted to throw the details out there and see if you all think it’s a deal or not and ask you what would YOU do? Or what options can you think of?




It’s a twin. 2 to 3 bedroom / 1 bath.
Owes about $58,500.
Mortgage payment $556 / mo.

Comps come in around roughly $55,000
Rents in the area are about $525 to $550.

Now the ex-boyfriends mom who lives in the house claims she will pay $700 / mo. plus all utilities except gas if she can stay and let her daughter and son-in-law move-in with her (she has been paying $300 / mo.)

In this scenario, remember that the seller will just flat out sign over the house to you and you also have your real estate license. Soooo, is it a deal or not? And what would YOU do?

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6 Responses to “So, is it a deal or not? What would YOU do?”

  1. Shae

    25. Aug, 2010

    WWSD?

    Well, I wouldn’t trust the whole “I’ll pay $700/mon in rent” scenario because that could change at any time and after she left, I’d still be stuck with a place with zero or potentially negative cashflow. Shae doesn’t play with no cashflow. LOL!

    If the place is in a decent neighborhood where people want to buy, I’d try to do a lease option on it and flip the lease option contract. The monthly lease option payment could more than cover the mortgage for the next couple years. Even though its underwater its not under by much so I can’t see a short sale option.
    .-= Shae´s last blog ..The Secret of Mitch Stephen’s Success with Private Money Lenders =-.

  2. mobilehomegurl

    25. Aug, 2010

    Hmmmm, what would I do? Personally, it’s too skinny for me. Though, I’m sure there may be some folks out there willing to take this “sub-to” and work out some kind of creative solution. I’d probably just pass it on to another investor.

    Great topic post, looking forward to more of these (what would you do?)! :)

    p.s. Funny but true saying Shae, “Shae doesen’t play with no cashflow!” I like it!! :)

  3. Esi

    26. Aug, 2010

    I’m with both Shae and Rachael on this one; it’s too skinny. You want to buy a property that is at least 70% of comp, that is (0.70 X 55,000 = 38,500). Let’s assume you are fine with $58,500 and you get $700/month in rent. After mortgage payment,(700-556 = 144 left) If you add taxes, insurance, gas, maintenance fees, others, that will be an additional $500 minimum. So in this case, it will be a negative cash flow every month. Even if you decide to do a lease option hoping to cash out in a year or two, you will be getting negative cashflow in the mean time. If you must buy the house, you might want to consider wholesaling the lease option to a private buyer, because the numbers might not work for an investor to take it on. Hope this helps.
    P.S: If the MIL has been paying $300, more than likely, $700 is a big jump for her and she might not be able to keep up with payment. If you evict her for whatever reason and get a new tenenat, you might only get the average rent of $550 which is less than mortgage.
    .-= Esi´s last blog ..Oh! What a day =-.

  4. Flippin' Carey

    29. Aug, 2010

    Thanks so much folks for your input.

    Now before I tell you what I decided to do, I just wanted to let Esi know that the mortgage payment includes taxes and insurance. So those wouldn’t be added again into the mix.

    With all of that said…..I told him that I would either a) List his property or b) If he could get his loan modified and have the payment drastically reduced then and only then would I consider taking over the mortgage sub2 (like I did his other house.)

    He’s still thinking about it…he really just wants to be done with it and was really hoping that he could just sign it over to me but for me…it’s a little too skinny of a deal for me to just take it as is.

    And Rachel…I think you’re on to something…a new topic post “what would YOU do?”

    We may have one coming up tomorrow or so ;-)

    Oh and Shae….I had to laugh at your WWSD lmao

  5. Shae

    29. Aug, 2010

    Happy to provide some comic relief ;-) Maybe he’ll be able to get a loan mod but I’ll tell you that I don’t know too many people getting those done successfully. More often I’m told that the bank offered something was essentially useless.
    .-= Shae´s last blog ..Refusing to be a Motivated Buyer =-.

  6. Flippin' Carey

    29. Aug, 2010

    I don’t even know if he wants to bother trying to get a loan mod. He’s one of those types that just wants to be done with it now and doesn’t want to take up too much time.

    So don’t know what he is gonna do really?

    But speaking of loan mods….my mom was in the middle of a re-fi when she got laid off….she was trying to get I think it was a 5 or 6% rate and they of course turned her down after they found out she was laid off.

    So the mortgage company said, instead we’re going to do a loan mod for you since you’re laid off and your interest rate will be 2%!!!!

    I was like dag…..I want a 2% mortgage! lol

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