Best Way To Structure This Deal????
I am new to RE Investing and was wondering the best way to structure this deal.
Total expenditure; which includes mortgage, repairs and back pmts is 15K. The house is assessed at 88K. So there is an equity of 73K (very conservative estimate). The owner has passed and his sibling has inherited the property. However the property is still in father's name. Now his sibling is in bk and is behind pmts on their own house and wants to get rid of the father's property. What is the best way to structure this deal?? Pl. post your reponses. My thanks in advance.
Regards
Hey investor,
I am a new investor in the Bk area and hope to jump completely into this by the end of the month. I believe that this is a perfect Get the deed! Take over the payments and agree to purchase the property for the current loan balance. Turn around and Lease/Option the property for more + higher monthly payments coming to you than what is going to the properties cost. The L/O buyer will put down a non refundable down payment to you with what ever rent credits you determine. How does that sound or something like that.
Hi ksmntci,
Sounds like a great deal if you can get it.......
However - if the person that wants to sell it to you does not have title, they cannot sell it to you. You need to find out exactly how title is held and if this person is in the true line to take title to the prop. Sometimes people think they will receive title when a person passes away but due to the decedents will or trust, or lack thereof, this person never actually gains title.
Before you spend too much time negotiating the deal/getting your heart set on your first purchase - talk further with this potential "owner" regarding how they are receiving title and when it will occur. Their word & wishful thinking often isn't enough.
Had a similar situation recently, with a "stated" heir - negotiated a great deal, talked, faxed, signed papers, almost opened escrow.....only to find out that this person wasn't the heir in line to receive this property - and it was so far behind in payments that the lender was foreclosing. (In CA, this will be held off by probate cause the decedent had no will.....messy, messy).
This is a good opportunity for you to learn some interesting stuff. Due diligence!
Good luck,
Noel
[addsig]
I really appreciate your input. More info on this lead;
They want to make as much as possible from this house and
are not ready to let it go for what is owed on the house. The house may be foreclosed in the next 1 or 2 months for not making the pmts (about 7 months behind) .
I asked what they would take if I bought the house for cash and closed quickly for which they said they need some
time to give me a price. I am going to call them tomorrow and wanted to know what kind of offers I could make. My exit strategy is to wholesale this property but
I am flexible for L/O.
================================Before you spend too much time negotiating the deal/getting your heart set on your first purchase - talk further with this potential "owner" regarding how they are receiving title and when it will occur. Their word & wishful thinking often isn't enough.
================================
What would be the right way for the potential owner to get the title? Could a will,trust or a quit claim deed be sufficient enough to get the title?
Thanks and regards
As stated earlierr, If the deceased had a will, or some other estate planning structure in place to transfer title in the event of their death, the party(ies) specified will get the title, generally as a part of the probate system going through the estate.
If not, how would you convince the deceased owner to execute a deed to transfer the title?
There may be no way to purchase this property outside of the foreclosure process.
You start with the tax records, then you research the title, then to court house and see if a probate has been opened. The estate may be exempt as its value is below the accepted values for probate.
Get on your horse. You start with your would be heir. Then back to the deceased, check again for estate if none check and see if there is an atty representing. If not offer to select one, get your man in as atty and take it from there. remember you can take Quit Claim Deeds in exchange for a note payable on perfection of a future title and on it goes. When in doubt talk to some deeply imbeded atty who is local and may know all the parties. Stay in contact and play it by ear. Sounds like it might be usable.
Enjoy Lucius
Just a quick thought...
you said the house was "assessed" at 88K. There is a difference between assessed and appraised. From what I have seen in my area assessed value is usually lower than FMV. However, there are other areas where this may not be the case.
Make sure you do a comparative market analysis (CMA) before you seriously negotiate. This will give you a better idea of what your max offer should be.
Good luck!
[addsig]
More info;
I talked to the potential "owner" and found that there is a will left behind by the owner which will be used to transfer the house in the name of the potential "owner".
Now, that being the case, what is the document that confirms the transfer of the house in the name of the potential "owner".
Thanx
Also,
Could someone tell me how I get "Auth to release information" signed if the title and mortgage is still in the deceased father's name.
Thanx
I believe that you need to find out who the trustee of the estate is, and get them to get the information for you. The lender may require a certified copy of the death certificate etc. before they will release this information, and then only to the trustee. Possibly.