Your Thouhgts On This Deal
Okay, I am conflicted. I am confident enough I can deal with this but I thought I would post something anyway. Bought John's manual and everthying everyone says of him is true. Great guy, thanks John. Here I am looking for anyone's thoughts because I didn't want to dump this whole thing on JL 
Will be closing on a deal this week. Decent house, could use some work. Here is my conflict. House is 4 payments back. Seller worked agreement with lender where seller makes next 4 payments on time, with guaranteed funds, back payments will be tacked onto end of loan. First payment was to be 15th but seller got them to except the 1st (January). They will be out by this weekend.
So, letter on the table from lender is pay by 15th. Seller asks me should they sign it. I say no, you need a new one to agree with verbal they got on phone. Also, seller understands that when we close, should lender call loan due, house will go to foreclosure and I will not be making payments. They have no problem with this since they would haved walked away anyway.
So, I am thinking when sellers move out about calling the lender (or faxing them) letting them know the sellers have moved out and have allowed me to manage the home. I would like to keep doing that if they are okay with that (or something like that) and will, per their agreement with sellers, make the payments with guaranteed funds. If it made a difference, I would even make up the back payments in 6 months (after I get it filled).
If they didn't agree, I wouldn't send the payment in and maybe even try to sell it for something before they foreclosed. Payoff around 113k and they had offers before of 119k, so I could at least get a couple of k out of it (assuming low closing cost, if any).
I am thinking of this, because on top of the deed, I got them to leave lots of furniture, including some nice heavy shelves, a nice dining room table and hutch\china cabinet, 2 refrigerators, patio table, plus some other nice pieces and contents of garage. So, I at least walk away with all that.
Fixed up a bit, I would do a lease purchase for at least 135k, so a much bigger back end.
Thoughts?
I'm the first one to admit that I don't know much about these deals, but right off the top of my head I would have to say that calling or faxing the lender to tell them what you are up to doesn't sound like a very good idea. The less they know the better, I say. Z
Just thought I would add 2 cents. It is possible to keep knowlege of the transfer from the lender...explore title holding trust. Should you just take title, I agree...no need to mention that to lender. If the current terms of the note are not superb, I don't see why they would call it due. If there is not much equity, they may end up losing money. In that case though, are you sure you want a deal with so little equity. Lease option may work for you. Why don't you make an attrative price with a significant down...2 year option at 125k with 10k down, or 130k with 5k down. Either way you get your cash up front, and have some cash for more deals. By the way, you may need to have back up financing for the lease option, should your note get called for some reason, or an escape clause for your tennant.[ Edited by nlsecor on Date 12/14/2003 ]
Ya, it is best not to tell lender. Guess I am a bit skitish since the seller's agreement is still up in the air. Would hate to get someone in there and then have them call it due. They were about to do that anyway until this agreement came up. Guess I will send in the first payment and go from there.
I, personally, would want to know the answers to the mortgage issue before proceeding. I wouldn't send in payment or close on the deal until I had everything in order. I would write up the terms I wanted and have the seller present this deal, in his/her name, and have the mortgage sign off on it before proceeding. What would keep the mortgage co. from accepting your payment and then call the note due. Call me crazy but I would have this resolved before going forward.
John
mrstooie,
Big broad shoulders, never a problem contacting me regarding a deal, you have my e-mail address and phone number so fire away.
There are sometimes many questions I ask concerning a pending deal, a little more than doing a back and forth between us on this board with the time involved.
My dime I will use it to help you.
John $Cash$ Locke