OfflineMatt was so right in Dean's new book. Once you get the mental block (doubt and fear) out of your head, you find deals everywhere! I just found the most textbook case for a motivated seller and I am meeting him tomorrow. Here are the details...
SFR
3bd 2bth
1134 Sq Ft
Carport 
but it's not uncommon in my area
TOTALLY REMODELED!!!
Price: Negotiable (He has it listed for $229k), the property is free and clear! 
FMV: Around 200k, but not sure, prices are all over the place, so I am waiting to hear back from my realtor.
The seller has moved to europe and is only back for a few months to sell the property. He tried listing with a realtor, but he said the agent was worthless. He tried renting, but the rental agency never followed through and he was in europe so he couldn't do anything about it. So the house has been sitting. Tomorrow I'm going to call my coach and see what strategies I could use to get this house. I definitely could wholesale the house, but now I'm thinking maybe I should have the seller finance the property for me and then I could rent it out. I don't know, I'm just really excited! Any suggestions from the pros?
KimmyJ
Hi Kimmy (land trust guru)
And mind you I am still a newbie. I believe you would want to know how much the owner paid for the house when they first bought it. Say they paid $95K for the house. If they sell it at $200K, they would make a profit of $105K. Now you know how much wiggle room you have to bargain them down. If you make an offer of 60% of the $200K FMV, you would offer $120K. They will definitely counter, so wait to hear what the counter is for. Remember, they HAVE to get rid of the home. Say that you both agree to $150K. You get a prop at 75% of FMV (and there is no rehab needed according to your comment above) and the seller still makes a profit of $55K.
If you can buy at 60% you can keep or wholesale it. But if you buy at 75%, you will most likely only be able to buy and hold and rent it/lease option it. Or, as you say, you can do a lease option with them as long as the strike/option price is a lower $ amount than the $200K and of course make sure if you rent it that it covers your PITI to at least breakeven or cash flow it.
Anyone else's thoughts would be appreciated. Please feel free to correct me if I am saying this wrong.
Neil
The seller paid way more for the property than its current market value. He told me he knows he is not going to recoup his money. So, I figure he has already prepared himself for losing lots of money.
Well, I just got back from meeting with the sellers. It was a no go for now. I feel sorry for them. They think the market is going to turn around in the next year or two, and that they will be able to get their asking price of $230k (which is already a a $145k loss for them). There house is appraising at $140k -$150K. Why oh why did this guy sink his entire retirement money into this house? He remodeled the inside, but the outside is nasty. On top of it, he put in a european size kitchen from IKEA. The stove was so small, you could maybe get a 10 lb turkey in the oven. I tried doing a seller financing deal, but they don't want to lose the money. I told them what investors want and they came back with first time buyers. I told them that even if they found a buyer at $200k, the bank would never approve the loan because the house won't appraise for that value. They were upset to hear that. So, I started giving them my "professional" opinion. Told them that since they own it free and clear, to hold on to it and rent it out. They asked me about Lease Option Purchase, but I told them no way would someone agree to $200k in this market. I told them that if they wanted to find a good tenant, that I could help them. I would charge them 1 mos. rent to do it. They asked me if I would be the property manager for them. I said I could do that if they wanted me to. Oh well, at least was good practice for me meeting and talking with a seller. I don't know what they're going to do. They moved to eastern europe and are only here for a couple of weeks.
Like you said, this was great practice for you. I haven't done any FSBOs, but have looked at a few REOS and 1 short sale. And I hear you about feeling bad for this guy. They are living overseas. I can't think of a MORE motivated buyer! They will soon come to realize that they need to sell the house so they don't have to worry about it. If he does decide to sell, I believe you will be able to get it at 60% of FMV. As you said above, he will also realize that it won't make sense to do a lease option purchase becuase he wouldn't be able to get more than the current FMV, and that will most likely be in 2 years.
I know it sounds bad that you are offering so much less than they paid for it, but you had nothing to do with that. These people just got caught in the buying frenzy. This is no different than if they bought Citibank stock. They would have lost a BUNDLE of money on that. EVERY investment is risky.
Keep us apprised and good luck! In this market, it's amazing to find ANYONE with equity in their home. You found it, now go and get it!
Neil
Got a inspection today on a home under contract from HUD for $73500. Approx $10-12000 in work. FMV $130000. I have a possible investor that will give me $81000.
Inspector said it was a very good rehab candidate. Do i take on the rehab job myself and hope to flip it in 1-2 months for a profit of $50000, or take the $7400 the investor will pay me as I really need the cash due to job loss.
Thanks for your opinions ,
Bruce
First time poster here!
In my opinion I personally would take the $7400 in this market there is no guarantee that house will sell in 1-2 months for any profit, plus you would need to figure in holding costs I would take the easy money and head off to the next deal.
IMO,
Matthew