Would You Do It?
House about to be foreclosed on Jan. 6th. FMV $130,000 Bank Payoff $110,000.
People are $7,500 behind, but have $5,000 cash.
They are looking to move back to New York to be closer to family.
Here is my intial thought. Help them catch up and cover the mortgage for the next few month until the house sells and split the proceeds after recovery of my cash 60/40....
Has anyone done this before? It just seems more cost effective than trying to buy them out and resell. This way I've eliminated the closing cost on a loan and have no credit issues on my side.
Please let me know your thoughts...the just called me yesterday about there problem.
Thanks!
Watch out for all the costs involved. Fixup could be thousands and commissions on the sale of $7500 plus the $7500 to reinstate will take away all the profit of just $20,000 that you will have to split. Sounds pretty thin
Good LUCK and HAPPY HOLIDAYS
Hope this helps some
Ted Jr
What if they change their mind and don't sell?
What if it CAN"T sell?
Who set FMV?
What is the local market like in that area?
A whole lot to consider. Sounds like a lot of risk for a little payback. I would look elsewhere to invest myself. Good luck!
Hmmm....the owners have 5K in cash. I would use that cash to my advantage and help them try to reinstate the loan by doing a forebearance ( tacking the arrearages to the end of the current loan) or either a loan modification. See if the bank will be willing to reinstate the loan and work out some sort of payment plan. After the forebearnce or loan modification..you can offer the Owners U-haul money then have the Sellers deed you the property Sub2. You can also make money by charging them a fee to do the forebearance or loan modification. I usually charge a $500.00 fee upfront (100% guaranteed....if I'm not successful they get 100% of their money back). However, you have to find out if you can charge for this type of service in your State. Good Luck!
Take it subject to. Write them an offer for 111K, get the mortgage current, and then jack up the selling price 10% to 143K and sell it on contract. Get 10% Down 14,300, pay yourself back the 7,500 to get the mortgage current, and take the other 6,800 and go to Hawaii for Christmas.
Okay...here is the update on this deal...
I've met with the parties involved and gotten more information plus have taken a tour of the house. Minor cosmetic problems is all the house has...less than 2K.
The original FMV was from the owners...but based on what I saw and comps in the area the FMV is more likely $150K. There is a catch though..... there is a home equity line of $12,000 on the property as well.....
I have letters from the owner granting me permission to speak with the bank and the attorney. Next step is to talk to them and see what options they have.
I didn't get in this business just to make a quick buck. I see this as an opportunity to help others.
Attorney? What attorney?