Happy New Year BP members!
I have a motivated owner who wants to get rid of her home that she abandoned due to her divorce, the property has been empty for over 3 years, it needs a lot of work, the home looks decrepit, I am able to look through the windows to get a look into the house to know that the inside of the house needs a lot of renovation.
This house is a 4 bed; 2 bath; 2,211 sqft; it was built in 1952. She lives in another state, I have had many dialogues with her to get the numbers on the property, she was able to talk to the bank that has the deed to confirm some of her numbers:
1st mortgage: $523K - Adj rate - about $2600 monthly payment
2nd mortgage: $45K - Adj rate - about $204/mo.
The bank told her they just want to get the house off their books, but they have not said what they are asking for the house, the bank did a recent appraisal (12/2013) of $250K which I think is very conservative, the 2012 taxes were $6,219.
I did a rough comparative market analysis which came out to $325K, a good ARV would be in the range of $299K to $330K (these are my rough numbers).
I have two exit strategies: 1. Buy(subject-to) and wholesale to a buyer.
2. Buy(subject-to), renovate then flip.
I believe a good rehab amount to get it to the $300K would be $35K.
I can use some expert advice from the BP family.
I know I left some information out. Any suggestions on how to approach this.
The owner wants some money back out of the deal, even though she lives in another state.
