Newbie Question

Comments(7)

• 
  tbelknap30th January, 2004

  Anything else Greg?
  
  Question 1: Buy Locke's course and it will explain why the seller will take U Haul money.
  
  Question 2: Not sure what you mean. If you have a balloon payment of 2 years than they have 2 years to refi. After that you will need to follow your state laws in getting them out of the house or talk them out yourself.
  
  Question 3: The original seller signed the note and mortgage so their credit is on the line when it comes to foreclosure.
  
  I am spent.
  
  
  Tom

• 
  bth12630th January, 2004

  I would "buy" the house for $160,000 - so that the seller is happy - and then assign the contract to a buyer/investor for $170 - 200k. Just put an ad in the paper...and take the most qualified or the one with cash.
  
  If the property needs some work, just subtract the amount from your purchase price.
  
  Anyway, sounds more like a wholesale deal to me. If you buy it sub-to, 10k for their equity sounds more reasonable (unless they are REALLY motivated)...and you still won't see any of that equity for another 1 or 2 years when your buyer refinances. But then again, maybe you can get a 20k downpayment in your area??

• 
  JeffAdams30th January, 2004

  Quote:
  On 2004-01-30 01:27, gregzilla wrote:
  Hello all!
  
  Since this is my first post, let me introduce myself. My name is Greg. And I'm a newbie in San Diego, CA!
  
  I just read through that long thread between John Locke and Suspain and there's one thing I'm still not very clear on when it comes to this Sub-2 stuff.
  
  If a seller has a loan balance of say $150,000 but the FMV of their house is $200,000 (or any other set of numbers in which the seller has a decent chunk of equity) why would they sub-2 to you for only 1k "U-Haul Money"?
  
  Or am I not getting something else? Like in that situation a seller wouldn't be motivated enough to sub-2 anyway?
  
  And on another note...
  
  If you sell CFD (as an example - the buyer must refinance in 2 years), what would a typical contract say if they weren't able or didn't want to refinance?
  
  And, one last question...
  
  If the lender exercised the due-on-sale before the buyer refinanced, would they come after the original seller? How would that be handled? What options would you have as the investor if you didn't have the cash to pay off the lender?
  
  Thanks,
  Greg
  To answer your questions:
  #1- If their house is in pre-foreclosure
  or is ready to go to "trustee" sale,
  then time is running out for these
  people. They typically do not have
  the time to sell by other conventional
  methods. In some cases, they will
  take a grand or two for you to take
  over payments, save their credit
  rating so they can get out of their
  situation they are in and get on with
  their life. "Cash For Keys" is not
  uncommon. However, where I
  operate, the going rate is typically
  $3k -$20k depending on the equity.
  Sometimes you come across that
  "Diamond in the rough" that wants
  to grant deed you their house to
  get out of the situation they are in.
  Yes, believe it or not, I have had
  people give me their houses with
  substantial equity!
  
  #2- The answer to this question varies
  as to how you structure the deal?
  I would recommend you find a "real"
  buyer who can get new loan. Or
  do a lease option and try to sell
  them the house at 110% of market
  value.
  
  #3- 99 out of 100 times the lender will
  not excercise their due on sale
  clause. If by chance they did. You
  could do a refinance or sell the
  property with a new loan in place.
  You could also "wholesale" the
  property to another investor.
  
  
  Best Riches,
  Jeffrey Adam
  
  _________________
  "The only place success comes before work
  is in the dictionary."
  
  [ Edited by JeffreyAdam on Date 01/30/2004 ][ Edited by JeffreyAdam on Date 01/30/2004 ]

• 
  goldmine30th January, 2004

  Gregzilla,
  
  I totally agree with JeffreyAdam, and like i've always learned (read elsewere), don't focus on finding properties but instead focus on finding "motivated sellers" ...
  
  Goldmine Bev

• 
  omega16th February, 2004

  goldmine
  
  What happened with you dear? We miss you on TCI. Been busy? Let us know what's new in good old Pleasanton, CA.
  
  Any recent action you want to tell us about?
  
  [ Edited by omega1 on Date 02/06/2004 ]

• 
  omega16th February, 2004

  I just wanted to add another momnet to Jeff's comments: If you are in foreclosure you didn't get there overnight, you got there buy being fiscally irresponsible(including losing the job) for a while and that include maxed out credit cards, other personal loans defaults , etc.
  
  With this in mind, the only hard part in such situation is figuring out why the seller left the equity in home when he could have gotten it through the equity line of credit that in the past 2-3years wen even up to 125% LTV. http://www.ditech.com [ Edited by omega1 on Date 02/06/2004 ]

• 
  goldmine30th March, 2004

  I'm back by popular demand (omega1) and yes I been very biz and a lot has happened since my last visit here
  I'll come back later, so watch for news ahead...
  
  GoldmineBev 8-)
  
  
  Quote:
  On 2004-02-06 01:17, omega1 wrote:
  goldmine
  
  What happened with you dear? We miss you on TCI. Been busy? Let us know what's new in good old Pleasanton, CA.
  
  Any recent action you want to tell us about?
  
  <IMG SRC="images/forum/smilies/icon_lol.gif">
  
  <font size=-1>[ Edited by omega1 on Date 02/06/2004 ]</font>