Offlinethrough the course of reading dean's book,"how to profit from real estate now",I came across a pre-forclosure with a very motivated seller. The property consists of three units but needs a lot of work.the asking price is 70k-75k.Ithink I can obtain this property for 60k-65k if I allow the owner to live there rent free for 3-6 months rent free while she finds housing. there are tennants in the other 2 units which have fallen behind on they're rents which in my opinion is the main reason why she has fallen behind on her mortgage.I am thinking about buying this property for 65k and putting 20k into cleaning and refurbishing and evicting non paying tennants. at which time I can rent to cover mortgage and expenses or sell at a decent profit since houses in this area are sellig for 100-130k. any ideas please help
need help with first deal
Posted on: Sun, 08/15/2010 - 11:49
Have you thought of doing a " subject to owners " financing deal. There a alot of ways work this propery.
If the seller lets you take it over subject to, you're paying any delinquent mortgage payments & all the subsequent mortgage payments. Any money for the rehab would have to come out of your pocket. The eviction should take place prior to you taking over the property, because that could drag out & you need paying tenants in there so as to be able to pay mortgage, taxes, insurance, maintenance, repairs. As for the seller staying there for free that long, that's a hard call because after 6 months of no rent from them & 30% less gross rent, you might have to evict them, which could take up to an additional 3 months...you would need a heck of a cash flow to pull that off & still make money.