[Wes Johnson]

Wes Johnson

Hello Group
I joined CFD in early April. I am located in Greenville SC area. I am new to RE investing and learning every day. I have a lead that come from the sellyourhousein7days.com website on Friday of last week. I have talked with the lady a couple of times since and have gathered all the data needed to analyse if a win/win solution can be structured.
I need someone to partner with me and help put together a solution for this lady.

Details;

House is located in Columbia SC
3/2, 1Car Garage, 1Sty, Vyl Siding, Built 2006, 1378 Sq Ft, Cent AC,
Lady is and Ab Owner, Rented Until 4/30/2012. Now Empty
She has moved back to DC area in Va with daughter due to serious health issues! Just wants rid of the home.
Home she believes is in great shape from renters(Not Verified) with only one issue in that renters smoked in the home.

Loan is 30 yr fixed, 5.625%
Org loan amount $132,080
Bal Due 5/1/12 $96,142
PITI $ 891.83 (All Current) Seems a little low to me? P/I is $760.33/mth 2011 Tax was $3032 as a rental.
Rents for $950mth (Verified with local Realtor)

I feel like a Lease/Option could be the answer?

Thanks
Wes Johnson

[Jackie Lange]

Jackie Lange

HI Wes

need more info..

i’m assuming she bought the house new in 2006. Is that correct?

What is it really worth today?

There may be other strategies which may be better than a lease option.

not enough cashflow for a rental.

would you like to keep this house for cash flow? or prefer to just get a big check and move on?

[Wes Johnson]

Wes Johnson

Hi Jackie
Thanks much for replying. Sorry I did not include that info in my original post!
I had a Realtor pull comps and it looks like $55sq/ft or 89k is today’s value and it is a slow market in this area. The positive’s are the house is located in great area, close to everything, that was built around the same time (05-06) and good school’s.
Yes you are correct she bought direct from the builder in Aug of 06.
Right now I need cash chunks Jackie!

Wes J

[Jackie Lange]

Jackie Lange

So, she owes more than it’s worth… not good.

The only thing I would do with the house is get an OPTION to buy subject to the mortgage then do a Highest Bidder Sale to find the buyer.

Offer it for sale with seller financing at $94.500 – sold to the person with the most down payment. ( you can bump up the price a little when selling with seller financing.

Then you will WRAP the underlying loan.

The down payment will give you that CHUNK of money you need. The spread between the payments you collect and the underlying loan pmt will be some extra cash flow for you.

NOTE — the option should clearly state that if you do not find a satisfactory buyer during the highest bidder sale, then you will not exercise your option to buy.

This is a lot safer for you than buying with a lease option.

If you buy with a lease option THEN try to find your tenant/buyer – it could be months before you find the right person with the right down payment. Meanwhile, you’re stuck making that payment every month plus you have to pay for utilities, yard work, etc etc etc.

There is a Highest Bidder Sale section in THE DEPOT — to get a refresher course on it. We’ve had several conference calls about it recently