Investor · Atlanta, GA · Member since 2014 · 33 posts · 11 votes
Hi Everyone!
I'm in the beginning stages of a potential wholesale deal and have some questions.
First, I want to say that this isn't my 1st deal, but it's the first deal that isn't completely straight forward and I know there are plenty of people with VERY creative deal structuring experience on here.
Assuming that the deal ends up being viable, how would you proceed with the following criteria:
1. The ARV is $250K
2. There are some major repairs that will be needed. For this exercise, let's assume it's $50K total.
3. The seller owns the house nearly free and clear....except for the complication...
4. The seller has a $65K HELOC.
How to proceed? Is it as straight forward as "I'll offer you $X minus the $65k heloc"?
A HELoC is essentially another form of an open mortgage. Why wouldn't you offer the vendor the price of the property minus your repair estimate (+ buffer) and leave it up to her/him to discharge their HELoC out of proceeds just as they would a remaining mortgage note?
A HELoC is essentially another form of an open mortgage. Why wouldn't you offer the vendor the price of the property minus your repair estimate (+ buffer) and leave it up to her/him to discharge their HELoC out of proceeds just as they would a remaining mortgage note?
Thanks, Roy. That's essentially what I meant...so it appears that made sense. I was also curious if there might be anything I would need to prepare for, or expect.