Short & Subject 2 Same Deal?

Here is the scenario that I am looking at right now to do a sub2. I have a property a couple blocks from the beach in Los Angeles with a FMV of $1.2M, sale date of 4/13/08, here are the loans:

1st-Countrywide- $787,000 + $40K arrears

2nd-HSBC- $192,000 + $15K arrears



What I would like to do is to get the 2nd to take a deep short at roughly 10% of what they are owed and then take the first sub2 and payoff the 2nd at closing? Or purchase the 2nd note? I would really appreciate everyones input on exactly how they would structure the deal. Thanks for the help.

Comments(11)

  • cwal15th March, 2008

    in this climate, how do you know it is not worth $600k...or less in 6 mos....I have a feeling that LA property is grossly overpriced and has a long way to fall...the question is how far...just my opinion of course... regards, CWal

  • Qwest15th March, 2008

    You are correct about a lot of LA property, but this is the prime real estate in the city we are talking about and I feel very comfortable with the value I am using.

  • bargain7616th March, 2008

    If you are comfortable with the values vs the encumbrances, this is how I would proceed:

    1. Negotiate the 2nd down to $20K if you can, then buy an assignment of the note rather than a satisfaction. This allows you flexibility regardless of how the rest of your deal works out.

    2. Then negotiate with the 1st as you wish.

    A Short Sale Sub - to? Rather unlikely, but let us know (how and if) it works out, OK?
    [addsig]

  • cjmazur29th February, 2008

    what prevents them from trashing the house?

  • das19979th March, 2008

    "We may even pay them monthly for the house if it made sense. I suppose its not much different then a typical subject too except were not paying cash up front."

    Why would you pay them for a sub-to? And I too would never leave the seller in place.[ Edited by das1997 on Date 03/09/2008 ]

  • jackbenimble11th March, 2008

    We decided it was worth it to cut them a check and move them out at the end of the month. Even though our disclosures are iron clad, better this way.

  • jrichman6518th March, 2008

    Smart move having them vacate the premises. As stated earlier, there are many prcedents that go against you leaving them in the house. The judge and attorneys will look at the situation negatively, all against you.

    Paperwork in that situation makes absolutely no difference.

  • das199718th November, 2007

    I use AUTOFORMS from getthedeed. you type in the details and it prints all the forms and multiple copies you need to take to the seller. I spent alot of time looking for the right forms and this program takes about 10 minutes to get the whole property package together to have the seller sign.
    Best of luck
    das1997

  • LeaseOptionKing10th January, 2008

    Just an added note, being a teacher/lecturer, I have the advantage of often being able to review other Courses, so what I am about to say is straight from the hip, as I have seen the GetTheDeed material. They say to tell the lender that you are the new "property manager." You have beneficial interest in the Trust, so this is clearly lender fraud. Buyer beware.
    [addsig]

  • das199731st January, 2008

    what would you recommend for a good forms disc, i have the get the deeds, but you make a great point. thanks

  • MichaelQuarles1st February, 2008

    Thats a lot of forms that you are asking for and most of use have spent a butt load of money creating "GREAT" forms so we dont have deals stolen from us...

    I would buy someones course on the type of investing youre looking to invest with in and make certain they apply to your state.

    My 12 page California contract works great in California and may not be worth anything in another state.

    As for taxes I would think you would want capital gains....

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