My First Property???
Is this statement set in stone (Should include mention of hardship of the owner and poor condition of the home when talking to the mitigator.) The reason I ask is I came across a property that is 4yrs. Old and in great condition but is in the first stages of foreclosure and the owner is willing to put it all in my hands as long as I can get her the equity and save her credit. The FMV is 238k, equity is 58k, original loan was 185k and the debt is 180k. This is my first so be gentle. I would like to short sale this property and pass it on and be the hero. I need advise on how to proceed.
Also the reason she wants to get rid of the property is because she decided not to marry the loser she built the house for.
Thank you all for any help
Gonzo 
Nice Job! If the current financing is attractive, how aggressive of a time frame does the seller want their equity. Will they accept a minimum of 2 years later?
Accept the current mortgage payment (if attractive)
Agree on the 2 year sales price with seller: $228K (due to cash needed to catch up payments and carry costs to market the property)
Complete Subject To documents
Owner moves out of the property according to the contract
Immediately advertise and show the property
Catch up past due mortgage payments
Create 2 year L/O property with buyers down payment to cover amount paid to past due payments
Set monthly rent to create cash flow
Sell property in 2 years for price above $230K
Just an overview, the details are REALLY covered in John's Subject To manual.
Eric & Rosa
[addsig]
Please be careful about promising to give her the equity, especially if you are doing a short sale.
It is my understanding that if the bank agrees to take less, they do not want the defaulted seller to get ANYTHING. Period that is it.
I believe that you would be better off with a Sub2 - keeping her name in place, catch up with the arrears, L/O to buy, have perspective buyer refi within a short time frame and buy you out and then you take care of the seller financing (sub 2 deal).
Of course you need to check with your attorney and be sure to read the banks fine print should you decide to ignore this advice and go for the short sale.
Another point, you might contact the bank and ask them if they would sell you the mortgage note at a discount. That way you purchase the note and can now negotiate with the current owner for lower monthly payments. Then again if she heartbroken over the dog that left her (LOL LOL) then think about setting up a L/O that gives her and you a monthly cash flow and amortizes her need for her equity.
She won’t agree to two years, she wants out asap.
Current mortgage payment (not attractive) $1,125 per month. Not doable for me.
I want to touch and go I can’t have a mortgage.
Thanks for the input
Thanks ligem,
And thank you classimg
I'll look into all of this
Gonzo
Hi Gonzo,
Sounds like the property is already in fairly good condition, and from the numbers you provided, it appears that the house is already at about a 75% LTV. The bank is already in a good position on this one, and chances are slim that they would Short Sale.
Remember to pre-qualify your short sale candidates before you spend too much time on them. Keep finding deals though, you are aheaded in the right direction. Best of Succcess!
BAMZ
I just thought I could talk the mortgage co. to take half or ¾ of the mortgage and then I could turn around and sell the property for less than market value and then she can pay off the mortgage, have her equity, I’d make a profit and everyone will be happy (in a nutshell).
Now is this possible or is this fantasy.
Now I’m not making light of this situation and I’m not as nieve as you think. I’m just an old man trying to get this straight in his head and make a buck.
Hi Gonzo,
Anything is possible in the business of discounting, but in this situation , it is not likely. If the mortgage company is already at a 75% LTV, then they will feel good that they can foreclose and get their entire investment back. Some mortgage companies will take heavy discounts (especially 2nd mortgages), but my experience has been that most lenders will Short Sale 75%-85% of the BPO.
The pre-foreclosures that I buy, I always ask the seller what they would like to see happen with their situation. They always tell me, "they just want out!" I have had a few that have told me that they would like their full or a large portion of their equity, however they are not in a good bargaining position. I just tell them the facts. I can stop their foreclosure and save their credit from further harm, and in addition offer them some moving money. But in order for the deal to work for me, I've got to make sure that I will be collecting a large check at the end of the transaction. You might just go ahead and offer this lady some moving money $500-$1000 and tell her that you will take over her debt and she can move on with her life. So there is still an opportunity here for you! Best of Success!
BAMZ
Thanks BAMZ
This is what I wanted to hear cut and dry, to the point and in laymans.
I’ll follow this up and let you know what happens.
Thanks again Gonzo
Go gett'em Gonzo,
and keep putting more in the hopper. If this one doesnt work out for you, start working on the next one. It truely is a numbers game!
BAMZ