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Updated almost 9 years ago on . Most recent reply

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John Chen
  • Investor
  • Atlanta, GA
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Can I make this a deal in any way?

John Chen
  • Investor
  • Atlanta, GA
Posted

3/2.5 1664sqft, the owner total owed $220,305, and he is 15 payments behind, which is about $28,456 to bring it back to current. ARV about 260k-270k. Movitated seller.

Can I turn this into a deal, any kind.  

Any idea appreciated.

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Joe Villeneuve
#4 All Forums Contributor
  • Plymouth, MI
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Joe Villeneuve
#4 All Forums Contributor
  • Plymouth, MI
Replied
Originally posted by @John Chen:

I'm thinking if I can purchased at $230,000 sell at 270k, I make 40k less cost..  Does this make sense?

 I think you're missing a lot of numbers though:

1 - How much of the 15 back payments is interest, and how much is principal?  This is important because the principal part will be subtracted from the $220k owed, but the interest will be added to it...and I would estimate that about $20k of the $28k back owed is interest.

2 - see #1...so, the real total owed at this point would be more like $240k...assuming there is no rehab to be done.

3 - Now, you need to cover this, and closing costs (no matter who pays them, they can't come out of the $240k owed (see #2).  Assuming about 10% for C.C., including 6% for REA commissions, you are looking at about another $26-27k added to the offer.

4 - Total minimum offer needed, to cover back owed, back payments, and C.C., would need to be about $267k.

So, this is a non starter...and no deal.

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