Best way to wholesale this property?

Best way to wholesale this property?

Investor · FL · Member since 2013 · 26 posts · 29 votes

I've a property im working on, here are the details:

Type: SFR

Sqft: 1000

Year Built: 50's

ARV: $55k

Repairs: $25k

Mortgage: $0

Status: Vacant

I need some insights on this one. 

Owner isn't able to be present to sell home and has signed a quit claim deed to his son so that his son can handle the transaction for him. The father has unpaid child support and back taxes to contend with.

The son hasn't submitted the deed to the clerk or courts to be processed because he is afraid that he would be liable for those taxes or child support (if there are any liens) if he did so. I've informed him that wouldn't be the case because the liens would prohibit the transaction from going through if there are any.

My due diligence tells me there are back taxes for 2 years due and that a bank purchased one of the certificates. The owner has until April of 2016 to resolve the liens before the bank can foreclose on the property.

My plan of attack was to market it as a wholesale deal for about $18k and resolve the lines if they come up during title encumbrance check during closing, thoughts as to a better strategy or as to why this isn't a good idea?

Thank.

0Reply
28 views

Most Popular Reply

Developer · Houston, TX · Member since 2015 · 1k+ posts · 1k+ votes
10y

So you want to sell it for $18k to a rehabber. They'll put in $25k to fix it up. They'll pay the back taxes. And then can make $2k after commission and closing costs? I don't understand what the thought process on this.

See this reply in the discussion

6 Replies

Jump to latestLatest
  • Developer · Houston, TX · Member since 2015 · 1k+ posts · 1k+ votes
    10y

    So you want to sell it for $18k to a rehabber. They'll put in $25k to fix it up. They'll pay the back taxes. And then can make $2k after commission and closing costs? I don't understand what the thought process on this.

  • Rental Property Investor · Marianna Florida · Member since 2011 · 357 posts · 169 votes
    10y

    Walk away

  • Ned CareyPro Member
    Moderator
    Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
    10y

    If a property has an ARV of only $55K and needs $25K in work it isn't worth much. If the father has judgments against him they have to be addressed to sell the property with clear title. You know there are back taxes. It sounds like a lot of work for nothing here.

  • Investor · FL · Member since 2013 · 26 posts · 29 votes
    10y
    Originally posted by @Ned Carey:

    If a propertbyy has an ARV of only $55K and needs $25K in work it isn't worth much. If the father has judgments against him they have to be addressed to sell the property with clear title. You know there are back taxes. It sounds like a lot of work for nothing here.

    You sir are right, I messed the calculation up, 13ish iis what I should have calculated.

  • Investor · FL · Member since 2013 · 26 posts · 29 votes
    10y
    Originally posted by @Ned Carey:

    If a property has an ARV of only $55K and needs $25K in work it isn't worth much. If the father has judgments against him they have to be addressed to sell the property with clear title. You know there are back taxes. It sounds like a lot of work for nothing here.

    Great point, to be clear, this is an atypical deal...I don't care to make a dime, this is one I've taken on to help a friend. I just need to understand the logistics behind getting the deal closed.

  • San Francisco, CA · Member since 2015 · 786 posts · 717 votes
    10y

    Assuming you had a deal, you would  first get the contract signed with the seller. Then you would use an assignment contract from your lawyer or from a seasoned investor to get an assignment fee. Make sure to use a escrow closer who has tons of experience with assignment contracts. 

    Better yet, JV with an experienced wholesaler to learn the ropes.

Join the conversationCreate a free account to reply, vote on answers and follow this thread.