Talked to Seller .....

[Jasmine Claye]

1955 property in quiet residential area for sale
2 bed 1 bath 1065 sq ft

*Seller lives out of town, asking $105,000
but willing to negotiate to pay off business debt
owes $90,000 mortgage paying $605 monthly with 2 mortgages
currently renting out at 700/month

*Seller says POLARIS (online comps tool) says ARV in good condition is $125,000 (haven't done own comps)

*Seller says everything works and needed work is cosmetic at about $10,000 (havent done walk through)

MPP formula = 70% of ARV - rehab costs
= 70% (125,000) - 10,000
= $77,500

MPP = $77,500 and seller has $90,000 mortgage
(did not negotiate with seller but is deal worth negotiating based on MPP and remaining mortgage?)

What do you guys think?

[Ned Carey]

It is worth asking a few more questions. The answer to those questions will tell you if it is worth pursuing. You need to know if and how much the seller is motivated. Not motivation = no deal.

The first question I would ask is "Do you need to get any money out of this or do you just want this problem to go away?"

If the owner needs money out of the transaction there is no deal here. You said "but willing to negotiate to pay off business debt " if that business debt is in addition to the mortgage, he or she, probably has no room to move.

If the owner just wants out regardless of what it takes then there may be a deal by shorting the mortgages.