Deal in So Cal, what do you guys think?

[Mike Imbriglio]

Hey all,

Wanted to get your input on this one. We got a new lead via Craigslist (we've surprisingly enough have had a little luck with Craigslist marketing). The person sounds pretty motivated. They want to move out closer to where their kids are at, they don't want to list with and agent because they don't want a bunch of people coming through the house, and via prop stream we found out there is a lien on the house from a couple years back and they actually owe around $135,000 more on the mortgage than they paid for it 13+ years ago (which seemed weird but I think there was a divorce a few years back and ownership transferred). I'm going to try to look up the county record to see if Propstream is completely accurate.

It sounds like there is very little work that needs to be done on the house maybe some light cosmetic work. We are getting pictures today. The house is worth $615,000 as-is (comps were around $620K and a lot of the other homes in the area are even more), and with a little work may be worth even more. It's in an area with pretty good schools. Not only that, it is only a 10 minute drive from the beach, which carries a lot of weight in So Cal. They owe around $440,000 which is the problem (they paid around $300K when they bought it). But if we could help them out with their issue and get it for $460,000 (maybe help them move, and get them out of massive debt and a lien), and the rehab is only $20,000 (if that). An investor could still make $100K- $120K on the property after closing and our fee. I know we aren't using the 70% rule here, but would you all consider Southern CA a little different of an animal because the housing prices are so much higher?

Would you do the deal Subject to?

It seems like a great buy and hold opportunity for an investor. Maybe the numbers just aren't there though. Thanks for any and all input.