What is the best strategy (if any)?

[Paul Simpson]

Motivated Seller

Wants to sell house for $75K

He also wants to finance if possible at 10%, 10 years, with a balloon payment.

He has done repairs, the house would only need cosmetic work and kitchen appliances

Inspection is complete

House is only worth $55K ARV

Market Value is $44K

What the heck do I do with this? Can I wholesale it? It doesn't seem like a big profit margin.

Could I possibly buy it as a long-term investment?

Could I flip it?

I'm a new investor and could use guidance here. 

[Adrien C.]

Assuming your numbers are correct:  

He's willing to do the financing because he knows a bank won't finance a loan for his asking price and a smart investor won't pay him what he wants. He's hoping some uneducated investor/homeowner gets all emotionally tied into it and the easy financing and signs the bottom line. My sister just did this- couldn't qualify for a loan. Found someone who would owner finance, fell in love with the house and "had to have it" and took the seller up on his financing. Fortunately for her, she lives in it and doesn't care about making a profit or good cash flow. But she'll never be able to refi anytime soon unless they drop a bunch of money (which they don't have) into it to get it to 95% LTV.

FYI- I'm a wholesaler. I buy properties that are ugly, distressed, whatever. A third of the properties I buy are from newbie investors who purchased a "deal" and were going to flip it. After realizing they are in too deep, they let it sit for some time as they figure out things. I find it, make a offer that is usually lower than their purchase price. They complain that they'll lose money. Lesson learned in RE is the money is made with the purchase and not the sale. It's not my job to help you turn your bad purchase into a good deal by over purchasing myself. If they don't like my offer, let it sit another 3-4 months sucking out more holding costs and make another offer even lower. Eventually they cut their loses.