Strategy Help

First, you need to know what the value of the property is. Typically assessed values are meaningless. Could be right but more often are WAY wrong.

Not surprising that she does not know this information about her home. If she has been there a while -- she perhaps is a widow, or a single senior, who needs the proceeds to make the move. Here is where you get into your own moral dilemma of helping her to get it sold, while at the same time not unecessarily taking advantage of her. You have to go with your inner moral compass. But -- helping her to get it sold may be providing her with a great service. The question I would have to ask myself -- how would I want someone to treat my own mother. As DG often has said -- don't get greedy.

Go to the tax records, print out a copy of the record for that house. It will show you lot size, assessed value, total square footage, etc. Run the comps as DG advises on the remainder of the houses in the neighborhood that have same BD,BA,lot sq.ft.,living area sq.ft. -- see what it works out to.
Present her with a well documented and written out pricing offer to show her how you can help her. If she does not need the money to move to the retirement home, she may tell you to forget it.

Thank you for the great tips! I agree... I definately don't want to rip her off or anything... what I would like to have us both walk away happy. She is a widow but I'm not sure if she needs the money or not. I printed out the info document from the city's assessor's office and it is hard to compare it to similar houses in the neighborhood... most houses were sold last Spring and summer before the big fall of prices. Also, her house needs a little TLC to modernize it. I would like to offer her something like $150k for it but I'd like to know the best way to finance it/back up my offer. I can try to get a buyer and just assign it but it needs some TLC before I can easily sell it and I can't put any TLC $ in to since it is not my house. I could also do a owner-financed sale although I'm not sure if that could really work. I could also try to offer to pay her mortgage payments as I try to find a buyer, etc, etc. Either way, I'm trying to find the best strategy without putting down any serious $.
Any advice would be greatly appreciated.
Thank you!

FInd out what she really wants. Does she need the money in order to buy into the retirement home? If so, this might be a deal for you.

Or would she prefer monthly cash flow. In that case, she might be interested in owner financing.

In both cases, you need to ask her. Generally, you can either get your price or your terms but not both (some exceptions of course). Which is most important to you? And to her?

Also, be up front with her and let her know you are an investor. You help link buyers and sellers in this down market. Let her know that you would like to create a win/win situation. Run the comps from the last 3 months and show her everything. If the comps show that $199k is a deal (although probably not if it has been on the market for over a year) ask her if you can find a buyer who will pay that if she will give you a small finders fee. Tell her that in exchange for the finders fee you will also keep the yard in good shape, keep the inside clean and take care of light maintanance. You would want to do all of these things anyway to get the most value out of the house. Or you could simply let her know you are an investor and you buy property at a discount to hold, rehab and rent then sell later for a profit. Explain to her that in order for you to make a profit you must buy the house below market value. In return she gets the hassle of owning an empty house off her hands and out of her mind. I am sure selling a house is something very confusing and frustrating to her and it is causing her a ton of stress which is not good for her. My 2 cents.

benbeka,

Lately I've been making double offers to sellers. I have my agent write up two offers, one at a lower cash price and one at, say, 25% cash to seller plus a land contract for the rest (a higher offer than the cash offer). I detail the dollar amount the seller would make over a ten-year period. Then my agent presents them both at the same time. So far, sellers have chosen the cash deal, which is better for me, but I think just having two offers in their hand makes them more apt to choose one rather than wait for another person to offer.
Working good so far.

Rina

Wow! Really good tips guys! I'll try them! Thank you!!!

I thought of one more question... I think I could sell the house for a good profit if the house had a fresh coat of paint, landscaping, window boxes, etc. If I got her to go in on an assignment contract, are those things I would have to pay for or is there a way I could have her do it? If I pay for it, then there is the risk that I don't find a buyer and loose the money I put in to it. Thoughts?

yes benbeka, thats correct that is a calculated risk, because you will have to pay for it, if you have the property under contract, however you could negotiate that with the seller in the purchase agreement on the property like offer $110,000 plus you will paint the exterior of the house, instead of offering $120,000, THINKING OUTSIDE THE BOX,YOUR HERO, SULLY.

Put in your offer! Make sure it is well below retail price. If you can do some light rehab that is a bonus or just leave that to the guy you assign it to. Good luck.