OfflineI used one of Dean's strategies from his new book Profit from Real Estate Right Now. It is where you go onto craigslist and email an ad that looks like a potential deal a small paragraph (p.63). Well, from doing this I got am email back from an FSBO.
Here's the details:
4bed 3.5bath
3032 sq ft
Built in 2001
Owner states excellent condition
Owes: $238K
Monthly payments: $1800 (p.i.t.i)
Bought for $242K
Appraised: $260K
Tax Value: $263K
Reason for selling - Relocating to NC
At first the owner told me that he wants $250K for the property. I asked him the finishing probing question, "If I can give you an all cash deal, what is the least you would take?" He didn't answer. However, the next day there was an email from him and he stated that he would take what he owes.
So, what are your thoughts on the potential prospect? How would you structure a deal out of this?
"The entrepreneur always searches for change, responds to it, and exploits it as an opportunity." — Peter F. Drucker
How recent is that appraisal and what are you seeing from doing your own comps on the property? What are rents going for in that area, and waht are the vacancy rates on bigger homes like that? I would call a property management company and get some data from them on the neighborhood and rental rates, vacancy rates, etc. Then run your own comps. If it appraised at $260k in 2007, you need to make sure it's still worth at least $238k today - no guarantees!
Let us know more details!
Tracey
I do not know the area but that house in central florida.
FMV around $220 (depending).
Randy
But I fail to see the great deal here. You are looking to purchase the property at TODAY's market value? Why would you pay FMV in the first place? Aren't we as investors trying to buy props at 50 cents on the $ (if not lower)to have built in equity when we purchase to either keep for ourselves or assign to an end buyer This deal sounds like you should do it as a short sale since it seems that the existing bal on the mtge is about = to the FMV (and might be under water). Say you offer 50% = say $130K based on $260K FMV. This # is way below the existing mtge balance and you would have to get the bank involved since this offer is much lower than the mtge bal.
Am I missing something here?
Neil