OfflineGreetings All,
we're new and trying to get our feet wet. Just came across an opportunity and not sure what to do:
Home details
Originally a Habitat for Humanity house
5 bedroom 2 full bath house assessed at 86,000
sits on 0.06 acres over 2000 feet
2 story house built in 1990
Needs paint, flooring, appliances and roof work
Assessed as needing about 7,000 dollars of work
Listed recent owners by city bought in:
June 2010 for 55,000 then sold to
latest buyer Sept 28th 2010 for 2500 dollars
Latest owner offering for 15,000 by Quit Claim
Also there is a monthly mortgage in place for 500 dollars
House is good for rental or flip. Rentals in the area for this type of prop goes for at least 1200 monthly. leaves 700 a month positive cash flow
I have the 15,000 available
Any suggestions on how to proceed with the deal and financially?
Have a Berry Good day with success in abundance to us all!
Just make absolutely certain who owns the property, and that the person selling it is the ONLY person who owns it. A quit claim deed allows the owner (or anyone) deed their share of the property to you. (Even if they don't own any of the property at all) Just because its quit claim deeded doesn't mean the person doing the QCD owns it outright; or that they have any ownership claim in it at all. It looks like you have looked up the owners information, but please make sure to do that if you haven't already.
AFTER checking ownership, proceed. First, It sounds like it needs a lot more than $7K in repairs based on what you wrote it needs. Get some accurate info on fix up costs. If you are serious about it, get a home inspector to check for hidden defects that may not be apparent. Have a realtor give you several comps in that neighborhood only, within the last 3 months to get a more accurate valuation of value. The closer to your property you're considering the better!
Are you going to take over the mortgage payments, or is the $15K the total sales price? You'll need a purchase agreement that stipulates the terms and if that is part of the sales price.
Remember, you make your profit when you buy the property, so make sure to get accurate information on repair costs and the value after repair. (ARV) before putting in your offer. You don't have to give them asking price either, you can negotiate something that works for both of you.
If having that $15K would be better utilized for another deal, see if you can do a purchase subject to the existing financing and find out how much cash they need upfront. Get creative, and stretch your money. 
Thanks so much for your thoughts. Yes I've gotten exact totals needed for the repairs and it will cost about 7 thousand. I'm now waiting for the agent to get back to me to show me his docs and start the paperwork. I'm told that 15 is the full amount and in cash needed. We will be also taking over the existing mortage. In VA it's allowed as long as there is only 1 mortgage on record
NEWBIE Question:
What exactly do you mean by this statement?
thanks again, your time and advice is appreciated!
Have a Berry Good day with success in abundance to us all!
is owed on the mortgage? Your essential price then is $15K + the amount owed on the mortgage? You are actually assuming the mortgage from the old owner. Will your name be on the mortgage?. Make sure you find out your final sales price. Getting an assumable loan is great; just check the terms of the loan (interest rate, how old the loan is, and what is still owed on the mortgage).
By VA, I take it you mean a VA loan, correct?