Newbie At Subject 2's...Is This A Deal I Should Go After?
I need help!!!
I have a homeowner that is currently in preforeclosure. He lost job with HP and currently working but salary now is half the amount he was bringing in before:
1. He is five-six months behind.
2. $2100/monthly mortgage, because he rolled a second into the first.
3. $12, 000 to reinstate.
4. $235,663.28 is payoff.
5. $225,000 is mortgage balance.
6. $134,000 was the original purchase amt.
7. has been in home since 1993.
8. $195,000 is apv from mortgage co.
9. $219,000 was the apv 1 1/2 yrs ago.
10. $180k-$195k selling prices of homes in his area.
Kitchen has been totally remodeled. Bathroom is being remodeled. 3bd/3ba. 3 levels.
Homeowner paying $850/car note and $1000/boat note.
Homeowner was considering filing Ch7.
From the looks of things the homeowner is way over is head. He said that he could pay the current mortgage but it is just too high.
How would you guys approach this type of deal?
If I opted to do a sub2, I would like to just flip it to an investor who could bring the loan current and then do the minor repairs and sell it. Is it worth it? Or should I just move on?
Thanks in advance for all your help and advices.
I would move on..your numbers are very upside down to sub2.
You can't get in light and you are paying way too much money for such little equity if any.[ Edited by nebulousd on Date 12/15/2003 ]
which one is foreclosing on the house, the first or second mortgagor??? if its the first... maybe it sounds like a good candidate for a short sale... you can probably short the second signifcantly in this case. jus find a way to fund the deal afterwards... private money, hard money or partner up... dont take it sub to cuz there isnt much time left and there is too much to make up... try to do a short while at the same time, have him sign an option with you on the house whileyou try to find a buyer.
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I do appreciate all of your assistance in this matter.
To Ahabion:
From what I understand according to the homeowner there is no second...He claims it is rolled into the first.
So, am I understanding that with sub2's it can be a duable deal if there is enough equity? And if there is no equity or very small eq., then try to find ways of doing a short sale?
Is there a minimum amount of equity you guys go after in sub2's.
Also, by this being a preforeclosure, is this why it would also not be feasible because of the time frame left before the auction date?
Thanks again.
A sub 2 is fine if there is little or no equity.
The problem with the deal you listed is the people are upside down meaning by the numbers you gave there is MORE owing than the house is worth.
Mike
This would be a good short-sale canidate. I'm not sure, to be honest, if you can combine a short sale and sub2 technique. I'm guessing it depends on the situation. Either way a short sale is the way to go likely. Other people are more knowlegable than I am in this area.
Ok all....Can a short sale and sub2 be combined in this deal..? please explain...thank you!
Short sales can't be combined with subject to. When you short sale, you get the bank to accept a reduced payoff as payment in full. So you would have to go get your own loan or have the cash lying around to pay the bank off.
thanks for the clarification Chriseaker.
Hi Millionaire,
Yes you can combine both the short and the sub2. I am in the middle of one right now. A while ago Short Sale Pro told me they can be tricky, and he was right. He would definitely be the one to ask about this.
Benny
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Are you guys serious???? why even give this deal a second look? this deal is $40000 UPSIDE DOWN!!!!!!!!!!!!!!!!!!!!
loan balance- comps alone!!! run run run
you would have to be a short sale GOD to get the discount to bring this into an equity situation.
_________________
B.G. & Wheeler D. LLc Inc.
(A division of: Half Vast Enterprises)
[ Edited by WheelerDealer on Date 12/20/2003 ]
Wheeler I never said he should go for the deal just answered his question about sub2 and shorts.
Benny
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I agree with WheelerDealer. You are looking at a clear $40,000 deficit. To chance a subject to, you would probably want to have the contractors sitting on ready, factor in the repair cost, and cross your fingers and hope the appraiser sees the improvement (in $$$) that you need.
It's probably doable but very risky....
Benny222,
How can a "Subject To" and a short sale be combined? Do you take the first "Subject To" and short sale a second? I know that does not apply in the above situation, I am just curious.
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