Wholesale Question: How can I make this a deal?

[David Stone]

I am relatively new to real estate investing (we have four rentals) and am brand new to wholesaling.  I sent out a yellow letter campaign in my area (Grays Harbor County, WA) and had a woman call me back about a certain property.  My intent was to wholesale it.  I was hoping to get some insight on how I might structure this deal to make it a real deal.

The property is in zip code 98541

It is a 3 bedroom 1.5 bath single family house located in town

The property is in need of some work.  The roof appears to be in good shape.  It needs some patch work on siding and maybe some paint.  I have not stepped inside the place since I am still early in the process with the owner, but she did describe "holes in the walls" from the tenant. 

She rents the house out, but the tenants are not taking care of the place and it doesn't sound like she is getting full rent each month.  They are month-to-month.

The woman doesn't know what to do and just wants to get rid of the property.

She said she owes $113,000 on the mortgage and according to my calculations the comps in the area are $130k on the low end for same bed/bath and +/- 250 sq ft.

BUT... rent in the area for a similar property is $1100/mo.

Obviously this is not a great cash deal and couldn't be flipped (at full price offer)

Are there investors interested in wholesale deals on properties that could be bought for ~10% off and produce positive cash-flow. (If I can structure it zero down and reasonable monthly payments)

My best guess was that IF this could be a deal, it would have to be constructed using a lease option.

I am open to any feedback (as I am new to wholesaling and this will help me structure future deals).  If you need any more info I may have forgot to post, I would be glad to post it.

Thanks!

Dave

[Wendell De Guzman]

I bought a deal for 93% of market value and made $37K profit on a house worth $170K. The way you do it is buy it "subject to" the existing mortgage and then sell it on a lease option. You can listen to it in my podcast interview - http://Biggerpockets.com/show65

The issue with your lead though is the rehab cost. If it's more than $5K, it's going to be tough to make money from it unless you can persuade the seller to bring money to the table.