Current Deal – Subject To

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  • 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?

    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.

    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.

    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?

    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.

    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.

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