Need Assistance In Chicago
Hello helpful friends! I just received a deed for a property in foreclosure. Before I run off to the recorder's office, I better make sure I do this correctly. The deed puts the property into a land trust which I set up with a local bank. I have a title report which came up clean except for the two liens (mortgages) which are now about 12 months in arrears. As of a month or two ago the payoffs totaled around $180k. As far as I can tell the comps are around $190k. It sounds like the lender (same lender for both mortgages) is willing to discuss a short sale. However the seller wants nothing to do with it any more - which is why I have the deed and the keys. I called the lender today and it sounds like the auction won't be until at least May. I am not in a position to put any money into this right now but I hate to lose it if I can make it work. What would you do?
Also, if you're curious, reinstatement would be at least $20k.
Thanks!
-Brian
I would try an offer a short sale w/ the lender...You probably still have time since the sell is in May. You would need to have the owner sign a POA /Authorization to release mortgage information.
I take it you've done a walk through of the property...Then you should be aware of the conditions...If you see that any repairs are needed, you would need to come up with estimates...If repairs are substantial, then call a few General contractors and have them each come out at different times and they will give you a written estimate...Use the highest estimate...Take pictures of the repairs...
compile a list of these repairs, your offer and forward to lender along with any other information they need w/ the short sale package.
At present, based on the information provided:
$180,000/Payoff
$190,000/comps
$20,0000/reinstate
There's no equity and no profit...The numbers do not make since.
[ Edited by millionaireinthemaking on Date 01/26/2004 ]
I agree I can't see how this is a deal. I can only see a headache. Please explain more, maybe I'm missing something
[addsig]
Release Authorization is already on file with the lender and their attorney. There are no repairs needed as far as I can tell. It is a newly rehabbed condo conversion (about 2 yrs).
And just in case my terminology was wrong: the reinstatement would leave a principal balance around $160k. So some might say there is at least $10k in equity here. Plus this is a rapidly appreciating "in-transition" area.
Regarding the short sale: can I proceed w/o the seller's assistance?
Let me ask the question this way: Should I go record the deed today?
Hello Brian,
were I in your position I would not record the deed. I'm unsure at this point what you would have to gain by doing that.
In any case, I'm an investor in the area (Lake Zurich). If you'd like I'd be willing to go over the details of the deal with you. Feel free to PM with your contact info and I'll get a hold of you.
-Ryan J. Schnabel