Well, there may not be a reason to walk. But maybe this is too complicated for a beginner.
“Now the seller has an option to buy until september.” you say. So this is an investor trying to make a buck off the real owner’s distress, much as you were hoping to do. If you want to walk away and lieave that investor to work things out for him/herself, I’d say “fine.”
I’d recommend that you NOT put a new loan on the property. Putting a new loan on a property you are planning to resell real soon seems like a poor idea to me.
You might, if you have the money, give the investor some money for bringing the situation to your attention. With you getting an assignment of that option ot purchase. Then, you could loan the current owner the money to bring the loan current. Secured by a new note with a new junior deed of trust or mortgage against the house. Then you try to get a buyer for the property at some price more than your option and the expenses you have put in.
Ok here’s the situation. The seller is going through foreclosure. The first is owned by a private individual and won’t discount the mortgage. “My guess is that an investor holds a first.” And the amount owed is 150,000.
The second is 25,000. Now the seller has an option to buy until september. The house was appraised at 188,000 5 years ago. Is there a deal to be had here. The person holding the first I beleive the seller told me that they would be happy to sell.
My thinking to structure this, if there was a deal to be had, is to discount the second. And then get a loan to completely buy out the first and second. But of course I would need to find enough money to completely buy out the house.
Then I would turn around and sell the house retail. There’s where I would make my profit.
The house is in the NICE area of town. Close to all the huge newer homes up on the mountain side. The owner “said” that the house is in really good shape. Course I would need to find out for myself.
But does anyone see a deal to be had here? I’m going to find the value of the house tomorrow.
Any ideas suggestions. How would you structure this? Would you just walk?