What would be some creative options??

Question

I have a friend who owns a condo in North Miami. She's currently attending school in St Lucia. The condo is vacant. She bought it as a foreclosure sale. She owns it but due to her transitions and not working her fees have amassed and she has to pay the outstanding liens against the property left by the last owner. So she has 7K in total that she has to pay and has no job or income to pay it. She asked me if I wanted to buy it I don't have the capital. I'd like to help her create a cash flowing situation out of this place.

I'm thinking some sort of partnership where I find someone in my family to front the 7k to bring her current and out of the red. I'm just stumped from there. I'm trying to figure out the best strategy.

I'm trying to figure out how to help her keep the Condo and leverage it for the potential cash flow.

I'm thinking some sort of partnership where I find someone in my family to front the 7k to bring her current and out of the red. I'm just stumped from there. I'm trying to figure out the best strategy.

I'm trying to figure out how to help her keep the Condo and leverage it for the potential cash flow.

Simon Campbell · Answer

The return on an investment is affected by the market area. Your best bet would be to call a local commercial appraiser (or better, stop by with a cup of coffee) and ask him or her. They will be much better able to give you a true picture of that market area. Oh, and by the way, it is nice to see someone who is willing to help out a friend without looking to personally make a profit. Kudos to you.

Jonathan Jacobs · Answer

Bill Gulley  I'm not really involved in this deal outside putting people together and informing my friend on what she might be able to do with her property.

The investor we have in mind isn't local to Miami so we've located a property manager in hopes of enabling the ability to put a tenant in the property as soon as possible.

Any suggestions on the % of interest earned on the investment?

As always thanks for chiming in.

Jonathan Jacobs · Answer

I'm glad this has caught the attention of Bill Gulley  I'll update when I figure exactly what she wants to do with the condo.  I told her to give me a list of outcomes  that's she would deem most favorable.  Due to the fact that she's in another country I can't really  do anything with the property without her say so.

I was thinking of wholesale because she bought it at a deep discount and if she could sell it for 65K then it would be a profitable deal for her and me. Even if the buyer wanted the 70% of ARV  which would be 45k that would produce enough for her and a  nice little fee for me.

I'll update the post as I get more details. Again Appreciate whatever advice and comments are given.

Bill Gulley · Answer

A second, 10/12%? See an attorney down there, she can call it an investment, still need market rents less mgt fees to cover this. Good luck, :)

Bill Gulley · Answer

You need to know the market rents. Sounds like she just wants out of debt, have the property pay for it and then keep it. It depends on market rents and if it will generate income sufficient to pull that off. I'd want my money back plus interest plus management fees to oversee the place. :)

Jonathan Jacobs · Answer

Okay so finally I'm back with an update on this situation.

The owner favors a situation where  an investor would invest in said property and obtain a  master lease of it for x amount of time to  recoup their investment  with interest.

The question I have now is what would be a favorable return on the 7K investment. Would most leave this up to the parties negotiating the deal or is there a general consensus on % of returns on investments that's acceptable?

Bill Gulley · Answer

He may not have a license, friends can help out, til something goes wrong, then what?

Let's get some details, but leasing is a good alternative. :)

Simon Campbell · Answer

Why not rent out the condo using the cash flow to pay off the debt. Then as the market improves, she can cash out on the appreciation in value. Meanwhile, she hires you as the property manager where you can take around 7 - 10% commission off of the top.

Sergio B. · Answer

I dont read anywhere the lien is from HOA ? Is there equitity ? Wholesale might be your bet!

Bill Gulley · Answer

Thanks, well, get a plan and the details and we will see. :)

What would be some creative options??

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