Real Estate Investing’s “Let’s Make a Deal”

June 6, 2008 | By | 3 Replies More

Real Estate Investing's Let's Make a DealToday we’re going to do something a little different! We’re going to give you a real life situation of a deal that came in this week and ask you to structure it as if it were your deal. To submit your deal structuring ideas, simply comment on the post, and there will be a reward for the best idea. In a follow up post, we will reveal how the deal was actually done.

The Scoop

A seller contacted us through one of our internet sites. She wants to dump her townhouse ASAP. It is a 3 bedroom 1-1/2 bath in a desirable neighborhood. She already has another house to move into.

INSIDER TIPKnowing a seller’s moving plans gives you an inside track on structuring the deal so that you can meet the seller’s needs.

Her Situation

The house reminds her of her ex, who passed away recently, and the house payment is one month behind. She wants nothing to do with the house anymore. This is common thread that we encounter with broken relationships. She said she wants to put some extra money in her pocket. But that is just an added benefit from selling, not her primary motivation.

Financial Details

She is asking $85,000 for the house. Her loan balance is $65,000 and was originated in 2001 on a 30 year fixed rate loan around 7%. It needs about $10-12k in repairs to the property. The ARV (after repaired value) of the property is between $120,000 and $125,000. Her monthly payment is around $700 (including PITI and regime fees). Rental rates in this area would bring about $875-925 per month.

Calling All Deal Makers!

How would you structure this deal to make it spin off the most amount of green possible? Take it from here!

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  1. ATurner says:

    I would offer to catch up her mortgage and give her some money to cover moving expenses. If she required more than that, I would try set it up to pay her when I sell the house.

    I would market it as a handyman lease option first. If I did not fill it within a month, go ahead and do the renovation and then lease option it.

  2. Patrick Riddle says:

    Sounds like a good way to get in the deal without too much money. I love doing handyman lease options. That way, you don’t have to go through the hassles of renovating and you’ve got that much more money in your pocket.