Any help would be appreciated!!!

(1) - If the seller's willing just to accept the 70K & the repairs are minimal you should able to assign it to cash buyer & make around 5K. This sounds like the best deal of the three, if the comps support the 110K value.
(2) - If the comps are around 70K & they won't take less than 68K, there's no room to make anything. As for doing a sandwich lease option, see how much
they want down & how much per month rent. Then determine if you can find a tenant buyer with a down payment a few thousand more so you can some cash in your pocket. Make sure you can collect a couple hundred more per month on the rent for yourself.
(3) - With 0 mortgage balance they don't need to unload unless they're tired of being landlords ... buy the asking price of 85K is high when the comps are 70K, you would have pay around 55K.
Hope this helps a little.

How did he purchase the property for zero but have a mortgage balance of $30K. Did he refi the property?

You have a exit strategy I think. The first thing you need to do is decide whether your bird dogging or assigning it.

Either way, you have deals that seem to be good deals for them but not for you. What I mean by that is they got great deals when they bought them, but your not. Why are you not?

They are asking near retail. They have no plan for you in the deal to make money. They are asking price points where they are making alot of money because it is time for them to cash out.

Ask yourself this and be honest with yourself. If you had unlimited money to buy these deals, would you buy them?

If you had any money to buy a deal, would either of these be one's you would choose?

I am a investor obviously and if you asked me to buy these deals from you here is what I would pay...

Deal one: I wouldn't, too little time to get deal done.

Deal two: $56,000.00 Reason: He has 30K balance, he is walking away with $26K minus closing costs.

Deal Three: $55,000.00

I am looking for turn key equity when I buy these type of deals.

deal #1 - only option is assignment but the big issue is will there be any interested parties at his asking price - scenario did not include what $ seller wants

#2 I see nothing in that deal for you except a referral fee from the seller to a buyer - seems seller is out of touch with current pricing - do not waste time if he wants 82K for a property worth 70K

#3 Brothers are investors and where is the money for you - perhaps the photo of you is why they are stringing you along - I would be amazed if there would ever be a dollar in this property for you. Paid 35K and invested that much more - want 85K - worth 70K - looks like waste of time. Men are dogs and might be spending time with a pretty lady which meets their objective but most likely will not meet yours.

Check out my blog in Everything Else (Bill O'Rafferty's daily info of importance) for some investment suggestions. Best wishes.

Hello Kelly,

Deal # 1:

1)What is the FMV? I'm unclear what is being said about the $70K "to break even" - is this his TOTAL outstanding mortgage balance?

2)How much are the arrears, ie: delinquent mortgage pmts., property taxes, etc.?

3) You really will not know what the equity is UNTIL you get an accurate number for cost of repairs. It will be hard to represent the property accurately to anyone until you know this. If you have a great enough spread you might be able to do an assignment or wholesale it providing you have at least a 30% plus spread and you don't get too hungry for your profit. Like Greg Murphy says, "always leave enough meat on the bone for the next person".

Deal # 2:

Perhaps you can do a lease option/sandwich lease on this one. Not knowing what your market conditions are, it's immpossible for me to know if this area is appreciating or not. IF it's appreciating ... then you have a shot to sell the concept of appreciation to your buyer. As it stands, there doesn't appear to be but a few thousand dollars spread which is nothing. Old saying, "I'll give you your price ... if you give me my terms"!

Deal # 3:

Again, not knowing this particular market, it's immpossible to know if it's appreciating or not. Obviously, at this point the seller(s) appear to be fixated on a price that is unrealistic as they're asking substantially more than the property is currently worth. That being said, the fact that they have no mortgage and all that equity just sitting there and don't want to be bothered owning the property any longer; if they truly no longer want to own it, you might have to give them a reality check. Depending upon their response if they come to their senses ... you might be able to get them to agree to an assignment for 12 months. You could inflate the monthly payments to the tenants X # of $, pick up a modest assignment fee and sent the brothers a payment each month. At least you'd receive something for your efforts and it could be a win-win situation; just a thought.

Good luck ....

Best,

Ralph

Thank you all for your responses.

These deals have not yet been negotiated. I will be meeting #1 property Saturday, #2 tomorrow evening, and #3 tomorrow evening. These numbers were all discussed over the phone when I was asking questions and gathering all of the information.

I did all of my researching after the calls, and that's when I pulled the comps and figured out the numbers. I plan on being prepared and ready to negotiate #'s when I meet with these owners.

He purchsed the property for $0, but then he borrowed $30 (Equity Loan) for the rehab work.

when an older person does a reverse mortgage on their property the bank gets the property when they die or their kids can decide to pay off the loan if they want to keep it, unless they are trying to sell it so they can make a profit and pay off the reverse mortgage. Is that what they are trying to do?

Thank you for your expertise.

He is not delinquent in payments. Reverse Mortgage is a Property Mortgage that pays you money as long as you live in your home. It's designed for people age 62 and older who own their homes and need cash. The loan is made against the equity in the home and isn’t paid off until you sell or move out of your home. In this case, he passed away and his son now owes a full balance of $70,000.

It makes things a little harder because you can't negotiate much with the seller. I asked him if the bank would take payments, and he told me no, it has to be paid in full.

The only reason I thought it would be worth looking at is because with the sale price @ $70,000, there is still $40,000 in equity to work with.

I'm hoping when I meet with the other two sellers, I can negotiate the price way down. This is all a learning experience for me, but from what I can see, there is equity to work with if I can get these sellers to agree on a much lower sale price.

bother with #2. He is not a motivated seller. You should already know what your MAO is and mention to him over the phone that you are going to be some where around blank and blank figure (make it 20k spread). If he tells you no then say thank you for you time and move on. Remember, time is your most valuable asset. Don't waste it on a homeowner who is unmotivated. Keep in a follow up file and call him every two weeks to see if he is interested in rethinking his sale price.

Your smoking hot lead is #3. They're losing their tenants and they're moving and don't want to be out of state landlords. I would be all over that lead like white on rice. I would have said, "I have some time today. Would 2pm work for you or is 5pm better?" I would let hours go by not days in meeting the seller. Another investor will see the need and grab it before you do.

Good luck...

I like # 1, lots of equity is always attractive, I always like to match the estimated monthly costs of running the home after purchase against what the rent would pull in to see if it would work for an investor. other wise I would think you would want to find an end buyer looking for a home in that neighborhood.

# 2 sounds like you should walk away.

#3 I would run the numbers like gceriani said. Put your offer out to them and see what they say.
Good luck either way.

(Bill, your too much lol )

Richie

I am super excited to see your are actually out there doing it!!! See its not that bad, and you'll learn alot as you go. Even if these deals don't work out just keep going its about the learning process.

I just had two wholesale deals fall apart this week. Oh well on to the next.

Remember its just a numbers game.

Stay at it. If you need any help let me know.

All the best,

Jason B

Thank you. It definitely is a work in progress. I'm just so darn afraid to pull the trigger.

If I had the confidence I needed, and I really knew what I was doing, I wouldn't be so hesitant.

But you're right, you learn as you go. Hopefully I don't do anything really stupid that will cost me money.

I feel like a baby taking her first steps.

Thank you,

Kelly