Seller called me regarding her father's house(she is the POA, Power of Attorney for her Dad). House is just being used as storage by sister-in-law and will be emptied by 09/27/04. Property has 3BR, 2BA, 2CarGa., needs TLC. I did not see the inside yet, but drove by and seems to
be OK from outside. Mortgage Bal: $50K, PITI: $1300.55, Yrs left: 5. Seller asking for $150K as is, Tax Value: $172.3K, Comps:$155, $160, $168.
I will be meeting with the seller after 9/27/04.
Q. What is my best way to structure the deal? Seller has prob. $80 - $90K equity. When I meet with her I want to be prepared with all the possible options and hopefully if this is a good deal, I want to get her sign my paperwork. Looks like she will be a motivated seller, because she had just been paying the mortgage for several months while sister-in-law had use the property as storage only.
A. Sounds like this one has great possibilities.
I would need a little more information before I could structure a deal or offer on this one.
Answer the following questions so that you know if you can make this deal happen:
1. Are you really negotiating with the owner? Just because the daughter has a POA she may not be the decision maker. The father may get involved or other family members. Make sure you are negotiating with the owner or decision maker.
2. If your contact is the decision maker, what does she want? Cash, monthly payments or does she just want to stop making the existing payments? Do not assume that she wants to walk away with a $90,000 check. She may want to just get her sister out of the property and stop making the $1300
After you answer these two questions you can begin to structure a possible offer. The offers could be all cash for a healthy discount (65% of the after repaired value) or you could also purchase the property subject to the note and pay her equity after you repair and sell the property.
There are many other combinations but they will be more obvious after you determine the motivation of the seller.