Last week I went with my realtor and looked at a house that was listed by an owner (not a short sale or reo). The house had been on the market well over 6 months. When we went to look at the house, it was trashed. It had been a rental for the previous 10 years. And had major deferred maintenance. The owner was asking $230K, which is current FMV. I wanted to offer him $150K, it needed $25K in repairs (conservative figure), I would have taken a $10K fee and sold it for $160K, giving the new owner a potential $45K profit. After talking to the owner, he owed $225K on the house and refused to take anything less, he wouldn't even consider a short sale. So, I walked away. Yesterday, I was perusing CL and BAM! Another wholesaler had the house listed. This is what they're offering.
Pay $9500 to purchase house (I'm sure this is the wholesaler fee)
Assume $225K loan
Current Payments are $1900 mo. including taxes & ins.
Rental for area is $1500-$1650 (no cashflow)
Repairs needed $25k minimum
After adding all this up, if someone was to purchase the house, assume the loan and payments and make the repairs, conservatively they would be in it for $259500. How is this a deal? They're in the hole for $29500 and they can't rent it out with cashflow. Am I missing something here?