Indianapolis Subject 2 Deal?

Question

I was contacted by a lady in Wayne Township, with a house she want's to sell in Clermont a small town west of Indianapolis.

She is 4 months behind on her mortgage.  She lost her husband last year, and she has been unable to make the payments on the house.  The house is vacant and she is living somewhere else.

The mortgage balance is $110,000

The PITI payment is : $810

The rent rate is: $1,100

The house was listed for $125k and sold for $117k two years ago.

It's a 3 bedroom 1.5 bath with full basement, and attached 1 car garage. The house is in great condition with good mechanicals, and a lot of updates.

There isn't enough equity for me to wholesale it or flip it.

Would this be a good Sub2 candidate if I sell it on a lease option?

Reasons for yes, reasons for no?

Kerry Smith · Answer

Bill Gulley wasn't trying to ruffle your tail feathers Bill, they are already ruffled...and when you say things like "I'm not going to go there," in response that's passive aggressive for - I'm going there.

Bill, you've got a ton of education, training, and real world experience, but the "yours truly" approach to your postings is quite counter culture to Bigger Pockets and the inter-webs as a whole. You are not "hurting anyone's feelings," you are however coming across as haughty and unapproachable.

Bill Gulley · Answer

Yes, I'm aware of that, I'm really a nice guy, or can be, it's pretty much the frustration with people not investigating anything for themselves, neither of you guys, but there are those that will post a question that is still being answered in active forms, just a few hours apart and they ask the same da__ question! Lazy!

It's much like skipping class on Friday, then coming to class on Monday and asking the question that was just addressed in front of the class on Friday.

No one here paid tuition to get individual training,

But, I think you're right, instead of jumping in posting every time someone mentions that great podcast I should say nothing at all. If someone is too greedy and stupid, they belong in jail or destroyed in business, but.... it's not all about them, it's also about the 3,12, 25 or 100 people in the public that that screw up, cheat, hurt or ruin doing unethical or illegal things they learn here or from some low life guru.

It's just out of frustration. Might try to see it from the "teacher's" side, would you want kids going through Medical School learning crap and then going out treating your family? We have witchdoctors here.  :)

Kerry Smith · Answer

@Ben G. it will be worth it, the podcast opened up my eyes to a lot of deals I would not have previously considered. Grant is a smart guy!

Let us know how your deal turns out Ben!

Ben G. · Answer

@Kerry Smith  already on it as we speak!  Now I'll be up until 3:30 in the am learning something new.  I knew I should have avoided the forums this late at night.  Always keeps me up late.

Dawn Anastasi · Answer

If you get 1100/month in rent and need to pay 810 to cover PITI, then your gross is 290 before reserves, PM, and other expenses.  Is 1100 including utilities or would the tenant pay utilities?

If you put aside 110 for a property manager, and 165 for maintenance/CapEx, and 91.30 for vacancy, then you're at -76.30 cash flow each month (negative).

Are you planning on self-managing?

How much work would the property need to get it rent-ready?

Account Closed · Answer

@Ben G. I can help you out with the short sale. Just let me know when you want to go that direction. Email me.

Account Closed · Answer

@Ben G. If you can't find any other option that works for both you and her then you may want to consider a short sale.

Kerry Smith · Answer

Bill Gulley had to step in, nor does it mean Ben should run out and execute said investment strategy without consulting a real estate attorney.

It's me trying to help another member who posted a question on the forums - that's it.

People Strategy

Kerry Smith · Answer

Awesome response Bill. I definitely understand and empathize with your frustrations. I've been a moderator on various web based communities since becoming active on the internet in 1994.

It is painful when people repost/rehash questions regarding information that was posted only hours or days before. You'd think everyone would know how to use the search function right? Unfortunately some people are either just not that good with their computers and the internet, may not even notice the search box, or as you've stated they are simply lazy!

Anyway, I really appreciate your knowledge and insights. I look forward to getting to know you better and following you here on BP.

Now get over and tear apart my 4-plex deal...

All the best!

Bill Gulley · Answer

Don't confuse commercial leases with residential, a commercial tenant can take the tax advantages and requirements for maintenance and repairs a residential tenant can not. Residential tenants can not be made to do repairs.....PERIOD! If you do, you're wrong. :)

Indianapolis Subject 2 Deal?

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