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Updated over 10 years ago,
Need advice pls! Fix and Flip or Subject-to? Buy from motivated seller
Hi there,
I want to get start on my fist deal and I just got this lead from my friend. He is moving to oversea and want to sell his house fast. This house hasn't been on the market yet. He has just told me yesterday. I want to buy to fix and flip his house but I'm not sure know how to structure this deal to make it profitable flip. Here is the detail. My friend said he want to sell his house for $140,000 after he fix it up (He said he got this asking price from a Realtor friend.) It needs some works and he said that it probably cost around $6,000 (from what he knows). This house was built in 1981. It's a 4bd 2 bth with 1,969 sq ft. He bought this house in 2006 for $130,000 with a 6.755% 30 years-fixed rate loan from the bank with 10% down and has PITI of $1,140 monthly. He has been paying that for 8 years.
He said if he don't have to fix anything he'll be willing to negotiate but I'm not sure if he will want to sell his house for 70% ARV - rehab cost. Any advice on negotiating?
I also think about doing the subject-to his existing mortgage if he still firm on his asking price and I can't make it a good flip deal. My exit strategy would be a lease option. However, I have no experience in either subject-to and lease option so I need someone to help and walk me through these strategies step by step please if that possible?
Thank you in advance
-Ari-