Is There A Deal Here??
The owner is in bk. The property has a FMV of 120K. There is a 1st Mortgage of about 60K and a 2nd of about 50K. Back pmts are about 5K each. The house doesn't need any repairs. The 2nd started the foreclosing process and was halted because of bk. Now they got the stay lifted and so the foreclosure process is on. The owner wants to get relief from the debt. How can I structure this deal?
Regards
Doesn't sound like anything you would want to waste your time with. 60K first, 50K second, 5K x2 back payments equals 120K or the FMV. There just simply doesn't seem to be any room in the deal.
Somebody told me that if I could buy the Ist and short the 2nd there could be a good deal here.
Any input please?
Thanx in advance
Is there a reason that you can not do a short sell? Is the first FHA or VA? I have heard that they are hard to short sell. Get the 1st down to 70% of the FMV and the 2nd down to 10% of their principle. Have the owner sign a warranty deed to you and an authorization letter so that you can talk to the banks. That will get you started.
Brenda
No, not yet. I will be talking to him next week and don't know what to do? First of he is in bk, so I will have to talk to his atty/trustee/??. The 2nd has got the stay lifted.
Also, if one doesn't short the 2nd there is no deal. My problem is that the 2nd is foreclosing and I don't know if I could approach 2nd mortgagor for a short. Is that a possibility?
Thanks
Not that I am a pessimist, but...If you have a good system in place and active, and this "deal" doesn't fit, cut your losses (time losses), Possible and probable are 2 different things. Good luck either way you go.
Unless you short sell to the second, you really should walk. Unless you plan to buy and move in, this sounds like you will be paying FMV for the property.
Where's the profit?
Cut to the chase so to speak. Offer to buy the second mortgage. Offer $25,000 or less cash. Then you can cure the first and resell the property for a profit. You should have about 70 % of the retail value invested. Once you get the second you can foreclose if you can not get the deed from the owner for less than a grand.
Good LUCK and Thank You
Hope this helps some
Ted Jr
PS You are not a creditor of the owner. The BK does not affect you and will not keep you from contacting the owner. The second lien holder can contact the owner too as they have a lift stay order. Trustee has nothing to do with the deal after lift stay except any loss the lender may incur.[ Edited by Tedjr on Date 01/03/2004 ]
I'm a little bit confused... so for the sake of my reply, let's agree that the "Trustee" is the bankruptcy court appointed Bankruptcy Trustee.
The Homeowner will need explicit, written permission from the Trustee before he/she can enter into a sales agreement.
You should enter into a sale sagreement contingent upon second mortgagee short sale approval.
The seek to short the second employing the appropriate short sale technique (compelling, factually supportive Proposal that accompanies the boilerplate application).
I am confused with what TedJr and TheShorSalePro say.
TedJr says;
PS You are not a creditor of the owner. The BK does not affect you and will not keep you from contacting the owner. The second lien holder can contact the owner too as they have a lift stay order. Trustee has nothing to do with the deal after lift stay except any loss the lender may incur.
TheShortSalePro says;
The Homeowner will need explicit, written permission from the Trustee before he/she can enter into a sales agreement.
These contradict one another.
Also, TheShortSalePro, could you please eloberate on "(compelling, factually supportive Proposal that accompanies the boilerplate application)."
Thanx for the inputs. I really appreciate all the input.
There are different types of "Trustees" in the distressed real estate arena. To avoid any confusion in my reply, I identified the type that I was referencing, a Bankruptcy Trustee.
TheShortSalePro,
could you please eloberate on "(compelling, factually supportive Proposal that accompanies the boilerplate application)." and give some examples of the things that I can present to the BPO.
Thanx in advance.
Forgive me if I am ignorant here but even if there isn't a possibility of a short sale, if it is in a decent area and not in need of repairs why not put it under contract and then attempt to LO it? I mean, would that not solve the problem with no equity in the property. You get cash up front, and then sell for the projected market value a couple years down the line. Sure you won't make a fortune off this deal but there is money to be made no?If I am wrong...well ummm...opps