Trying to help

[Jim Viens]

So I'm a newbie and just looked at a house I found on Craigslist. Set up the time to go look at it then started doing my research. Guy bought the house in 2006 for $57,100 and took out a 2nd for $10k a few months later. No other liens on the property. He's tried to rehab the 1100 sf 3/1 bungalow over that time but ran out of time/money/motivation or some combination thereof. Good points: New plumbing, new septic, newer water heater, furnace & a/c and mostly new electrical. The bad: needs the rest of the electrical done, new roof/gutters, windows, sheetrock work and full kitchen rehab. His ad states he's "pretty firm" on $75k but is kind of desparate and may be flexible. When I talked to him, he just wants to be out from under the debt. I planted the seed of a "subject to" to give him something to consider. I'm guessing the mortgage payments probably total around $500/mo with a balance of about $60k. I then told him I'd work on some numbers and get back with him by Sunday night. I'm estimating $25k in rehab cost. Hard to get comps in the area  as prices are all over the place for the few listings there are and there haven't been many recent sales in the area. I'm thinking it might pull $80-$85k on the back-end if I flip it or it might rent for around $850-$900/month if I hold it or do a lease-option. The numbers are squeaky tight. What say you, BP Nation? Should I go ahead with the subject-to see if maybe a short-sale with the bank would be an option or walk? (I'm guessing which way this is going but figured I'd ask anyway.) Thanks in advance everybody!

[Bill Jacobsen]

When I run the numbers I get a buy price of about $25,000.  I would never go with a might sell for $80K to 85K.  If my number was that far away from the owed amount or his asking price I would probably not waste any more time on it.

Just my opinion.

Good Luck.

Bill