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I am looking to do my first HBS. I’ve referenced this property before on the forum (3/2 1500 sq ft) and both Don and Jackie were kind enough to give me some great tips. Now, having evicted the tenant and had the opportunity to go inside and confirm my original suspicions: +/- $25K-35K in repairs and renovations. ARV: $200-225K, I’m deciding to pass on the renovation and sell to a fellow investor. The house is set to be sold on the courthouse steps in a little over a month so I don’t have much time and would like to find a way to squeeze a little money out of the deal for the homeowner by doing owner financing. Jackie’s suggestion of doing HBS for down payment looks like a good one.
Jackie wrote:
The RISK FREE way to do this deal is to get an OPTION for the mortgage balances, then offer it for sale with seller financing with a minimum $10k down (to cover back payments), You get all proceeds over the down payment as immediate cash to you. Wrap the underlying loan with a much higher interest rate so you can a really good cash flow every month too. If structured correctly, you’ll have a back end payment as well. You could put a 1 year balloon on the note so you get cashed out soon.IF you sold this with a highest bidder sale for the highest down payment, you would literally have investors fighting over who will give you the most down payment.
Let someone else deal with the hassles of rehabbing the house.
So, that’s my plan.
However, three questions:
1) would having the mortgage broker their be of assistance with highest down payment? I’m concerned of the risk that the flipper screws up and I get the house back.
2) I’ve got the house clear of abandoned furniture but there still is bad mold on the inside of the property. I’m worried that even with the owner financing offer, people will be reluctant to pay a high price for a property suffering mold damage. I have some quotes from mold remediation companies but I’m thinking about taking a knife and cutting out the drywall or scrubbing it with bleach and water to mitigate some of the effect. or should I not worry about it and just focus on marketing.
3) the neighborhood is 50% Hispanic. Fortunately, I speak Spanish but I was wondering if anyone here in the forums can give me some specific suggestions for marketing to that demographic.As always, thanks in advance
JBJeff
you don’t have much time – just start advertising this on craigslist and local investor groups. still advertise it as seller financing
to hopefully get enough down to cover the arrears and still make a profit for you.you do not need a mortgage broker.
If you get it back, not a big deal, you can sell it again but with a bigger profit next time
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