OfflineI just got a reply (my first potential customer, no less!)from my website.
His situation is this:
He is considering selling his house. He is currently replacing flooring and sheet rock. He currently owes $20,000 on a mortgage.
Can a profit be made from this venture?
Also, would it be ethical and legal to bring in a buyer by offering it slightly below FMV(the median FMV for his area, which is a small town is $48,500) with an explanation to the buyer of the mortgage situation? Or should I consider another option aside from personally buying it with my money?
This is preliminary as I have not yet received a reply to my inquire as to the details (foreclosure, ARM, condition of house, etc). I'm asking this for advance information
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To answer your question, you may or may not be able to make a profit on this deal.
You need to figure out what we call the After Repair Value (ARV) is. That means if you were to buy it, or one of your investors, and put some money into it to fix it up, what would the fair market value be? If the ARV is more than what you have into it, you would have equity into the deal, if it is less, then you will have a negative equity position-not good.
You would need to offer about 60 - 65% of the ARV as an offer. If they will sell at that price, you will probably make a profit.
The beauty about this site is before you finalize a deal on this, bring your numbers here and we will help you.
Do not put the address, just the figures.
Good luck!
Karen
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