Luxury Home Sub-2 HELP

yproperties, a few questions before I say what I would do with this kind of a lead:

what general area is this property located?

where in your market does a property like this fall? is it a regular bread and butter middle class property? upper end? How long are houses on the market there? Upper end houses usually take longer to sell. The current market conditions may tell you why she hasn't sold it yet.

Is she current with her mortgage payments? Does she foresee having problems making the payments in the near future (do NOT ask her these 2 questions, you have to find out without asking her these questions. They can and do make sellers embarrassed by and resentful of). Do your due dilligence and you can find this stuff out withouit asking those questions. As someone who had many financial disasters in my past, those questions would get a negative comment from me. I would tell you what I have said, but this is a family website. You get the idea.

Does she absolutely need the up front money, or could she possibly wait a couple of years?

I would look deeper into the market, and why her house didnt sell for $510K. Do more homework on the $550K ARV. If you are already sure, my apologies, just be sure one way or the other.

I will gladly give a better opinion knowing the above. I would want to do this with no upfront cost, with the possible exception of paint and carpet. You might get away without that too. Her motivation and needs must be determined to give a better opinion. This is a perfect sub 2 deal, if you can get in without giving her the $15K RIGHT NOW. I will give a detailed opinion of how I would handle this lead if I know some of the above.

Now, the above being said, I'm going to give an example, using a 5% annual appreciation, and assuming she needs out really bad, and soon. Also assuming you can do it without giving her cash right now. I will also use your $550 current ARV

BUY...take sub 2 her balance of 440K, no upfront cash. REMEMBER to factor in any possible holding costs.

SELL....land contract, 30 year ammo, payments of $2700-2800, buyers have 2-3 years to refi. Sell for the $550 ARV + 10% (5% annual appreciation times 2 years), means sell for around $600K. get $25-30K down if possible, or maybe take a little less if the new buyers will take care of the carpet and paint. Thus, no upfront cash out of your pocket. The appreciation value I used is what I will use for my area. Your area may be different. This is just an example of what I would do if I got this lead in my market.

With regards to the sellers equity, negotiate to give her a certain amount or a certain percentage of the difference between her mortgage balance and your future sale price. This can be a great way to negotiate that you don't give her anything now. Yuo can offer to give her double the $15K she wants, if she will wait until your buyer cashes you out to get it.

Final results:

You make an upfront profit of $25K

Monthly, $200-300 per, depending on what payment you charge your buyers, so $2400-3600 total over 2 years.

Back end, $600K you sell for, less her $440K mortgage getting paid off, less the $25K your buyers put down, less the #30K you give the seller when your buyer refi's, leaves you a backend profit of 105K.

Seller wins....her mortgage will be paid off, and if she can wait, she will get double the $15K she asked for as a down payment for her equity.

Buyer wins, gets in without qualifying

You win by making money and solving the sellers problem

Everyone is happy, life is good for all of the above. But the above assumes the things I listed. The sellers needs and motivation have to be determined first, especially regarding the upfront money.