Help To Structure The Deal
I have a motivated seller contemplating to give her house on Sub2. Loan balance = 80K, Value = $110. She wants $20K in cash NOW.
Can I ask her to take a equity line of credit ? Any other suggestions?
Doesn't sound like much motivation to me. Maybe you need to dig a bit further. What is she ging to do with the house if you aren't able to buy it?
If she took a hard stance on the 20K cash today then I would walk away.
She has a contingency contract on another house she intends to move into. She needs the cash from this house as her downpayment.
Even if I negotiate her down to (say) $15K, I dont want to write her a check for that amount...so, how can I come up with some cash for her ?
Any suggestions ???
Maha,
Just my 2 cents but this does NOT sound like a potentional sub-2 deal.
This is a typical normal sale, you need to re-fi the property with new financing to cash her out with that little equity (20k out of 110k) if she must have cash.
Let me tell you what good sub-2's are:
1) Pre-foreclosures!! Homes sellers cant make payments on, the sellers will gladly sell sub-2 and take back notes for any or no equity in there homes; and 2) homes which are vacant and the owner is paying an existing mortgage payment.
In my experience if a home doesn't meet above criteria a sub-2 is out of the question for the most part.. On my sub-2's I always have the owner take back a note (in pre-foreclosures) which is of course unsecured and in vacant homes somtimes a second instead of a note if the owner insists.
PS: I have yet to buy or read any books or courses on sub-2s. What I do, I have come up with on my own, so I may know nothing or be wrong..
I gotta run right now, email me **Please See My Profile** if ya have a question.
Chris
Maha
There's nothing here. You need to tell her that maybe she should see a Realtor. I'm not sure she'd be able to net that amount especially if her holding costs are included.
Find out what she needs for this other house (rock bottom). That amount may be doable. If not, tell her to call you if nothing else works out.
I may be off here but that is a very good question! I have done a similar type thing so the short answer to your question is YES.
I bought a house SUB2 for $170,000 which needed about $40,000 for rehab. The seller refianced her second mortgage on the property and then gave me a loan for the cash-out she received.
I have not yet purchased any SUB2 reading materials so my technique may not be textbook SUB2 but something similar can certainly work for you!
On the flip side...why would you do this? There is only $30,000 in equity here and there doesn't seem like a lot of profit here. I'm curious...what are your intentions for the property?