Best strategy for major repair needed & 50% equity?

[Greg Larson]

Hi BP,

I have an appointment scheduled to go look at this property next Tuesday.  I'm hoping to hear opinions from other investors on the best way to handle a situation like this.

Situation:

A vacant home was burglarized and vandalized while the seller was in the hospital.  He says they gutted the place and stole everything including the AC.

He's now living out of state with family, because the subject property is unlivable.  

Numbers:

1300 sq ft ranch home.

I haven't seen the place yet, but I'm anticipating $80 - $90 /sq ft in repairs which would put the full rehab estimate at let's say $120k.

I've looked at comps and pegged the value to be approximately $215k.

The seller owes $85k on the property still. His monthly PITI is about $850

Solution:

The best solution I can think of here is to wholesale this deal to a fix & flip investor that would take the property over subject to and bring in their own funds for the rehab.  Then, eventually refinance when their rehab is complete.  However, I'm not sure that the numbers support that yet, plus a profit for the investor and an assignment fee. I'm hoping that I show up and the rehab is far less than what he's telling me, but that is wishful thinking!

Thanks in advance for any suggestions, strategies, or feedback you can provide on this situation!