[Jordan McCoy]

Jordan McCoy

Current Deal
3/2 Block Home 1900 sq ft.
Sebring, FL

ARV 200K
Purchase Price 120K
Subject to Existing Mortgage – 93K
Interest Rate – 5.12%
Loan Maturity – 06/2049
PITI- $800
Cash to Close – $5,000
Balance – 22K To be paid in equal payments over 60 months at 0%
Currently Rented – $1,300,
Rehab -35K

Thoughts on this deal?

[Jackie Lange]

Jackie Lange

Since it is rented, do you plan to kick out the tenants to do the $35k rehab or not do any rehab?

With a $366 payment every month PLUS the $800 PITI, that leaves almost NO cash flow.

It would be better to negotiate to no payments on the $22k for 5 years. Or, even better no $22k at all.

Instead of buying the house, what about a lease with an option? It would be safer.

[Jordan McCoy]

Jordan McCoy

First thought…
Get tenants out and do a clean out and
Put back on market for 169k as is..

I put it together that way to get into the deal cheap
For a short term exit whether I decide to assign it, rehab it or sell on OF.

[DANNY PLUEDDEMANN]

DANNY PLUEDDEMANN

Hey Jordan, I agree with Jackie that the cash flow is break-even at best as a rental once you factor in maintenance, vacancy, and management.

Would the seller agree to sign the house over to you to rehab and then get paid 50% of the profit when it sells? So you would recoup the 35k for the rehab and then split the rest of the profit?

[Jordan McCoy]

Jordan McCoy

We don’t need to even renovate it to make 30-40k as it sits by just putting it back on the market. The retail market is crazy and little to no inventory.

[Jackie Lange]

Jackie Lange

To reduce risks and out of pocket expenses, you could accomplish everything you want to do by just getting an OPTION on the property with a stipulation that the owner needs to get the tenants out. Then do a Highest Bidder Sale. You can stay off title this way.