Preforeclosure Sale Under Contract
I have a preforeclosure under contract for 10 days. I want to assign the contract to another investor. This is my first preforeclosure and I don't know what the next step is. Does the bank have to be contacted to let them know that the house will be purchased. How would I structure the deal so that it will be appealing to another investor. Specifics are:
home value: 362,000
mortgage: 255,786.82
repairs: 7,000 (estimate)
owner needs 30 days to move and wants the equity out of the house. Couldn't sell her on a sub to deal. Will need all cash buyer.
2 family home
2nd apartment vacant
foreclosure sale date is in 14 days
taxes up to date.
What is the next step. I am already having a contractor in to give me a written estimate on repairs, and I verified all the liens on the property. Whats next? Help please!!!!!!!
I think you need to clarify on "wants the equity of the house" I hope she isn't expecting to get all of her equity...
You're absolutely correct. I should have been more specific. She wants $30,000 of the equity out of the house. What I meant was that she is unwilling to do a sub to deal. Is there another way to structure a deal so that she can get the 30,000 equity, I can get my fee and make it appealing to an investor. The only solution I see is an all cash deal, pay off mortgage, repair, and resell. Any other options and advice is welcomed
First of all make sure your "home value" number is correct (as in not from the seller ) The number do look good but don't let that cloud your judgement. Do your homework (due diligence). First things first get the seller to sign a release of information so the bank will discuss the loan with you. Then you can make sure your numbers are current. Remember that banks don't want to own houses you are solving a problem for them and for the seller.
Then you need to get a P&S agreement so you control the property (but don't own yet) which you can assign to an investor. In essence wholesaling
You could also do a L/O and get more $$ or sell to a buyer who comes in with traditional financing of his own. Just to cite a few ideas.
Part of your due diligence should be to look up comps, not just for the price tag but also to see how long they were on the market. Of course you'll have holding costs with these. Get an idea of how easy it will be to move the property - if it will be hard to move - adjust your price.
Very sound advice
thank you