I Think I Found a Deal

[Guillermo Vladimir Robles]

I found a property on an MLS service in south Los Angeles priced at $425k and with an estimated ARV of $699k. I have about $1k to make this deal work and I calculate about $35k in repairs. I want to potentially wholesale or do an Novation agreement because I wouldn't want to buy and hold there. I haven't talked to the listing agent because I wouldn't know what to say. Any advice on cementing a deal like this would be appreciated. Thanks.

[Jeff Copeland]

It's highly doubtful that there is a deal with $274k (65%) spread needing only $35k in rehab just sitting unsold on the MLS. If it looks too good to be true, it probably is. Your job, as a potential buyer or wholesaler, is to find out why. 

The other harsh reality is you just can't buy a $425k property with $1k liquid cash. You would most likely need a money partner to take down this deal. 

Even to wholesale it, the seller is likely going to want to see proof of funds, and no hard money lender is going agree to fund it at 99% LTV.

My advice would be to seek out an experienced local partner who can help you 1) analyze the deal, and 2) fund the deal if it is in fact such a home run. 

Don't get me wrong: Finding and analyzing deals like this is the fun and exciting part! I'm not trying to discourage you, just urging caution and suggesting a way forward.