I bought a house in foreclosure and have $485 into it. House was purchased for $525 2yrs ago, but boy has market changed here at that price point. I thought easy slam dunk, not a lot of work, sell for $525, make a quick $15-ish after a couple months, NOPE.
I was going to give up and rent house for a year and put on market next spring. Rent would be $2,900/mo (3 bed, 2 bath, 3 car garage) this is about top rent here. Taxes, insurance & HOA fees are costing me $1130 every month. Luckily I'm not paying any interest.
Now I have a buyer who wants to pay $480 with $20k non refundable deposit. Buyer would pay $2,900/mo interest for 9-12 months then pay a $460k final ballon payment.
Buyer is in construction and plans to finish out basement adding 2 bedrooms, 1 bath, family room with wet bar. With remodel done they think they can list house for $595 next year with additional finished sq ft.
I would obviously not do this without my attorney writing a good "Deed of Trust" contract for max of 1 year vs. land contract for easier foreclosure. The interest they are willing to pay seems like a no brainer, but I'm just not sure. I guess I run the risk they only get remodel partially done and default.
Any thoughts ?
Thanks for reading.