Posted by Randall Porter on July 27, 2001 at 12:57:23:
One piece of missing info on this deal is the current condition of the property. Does it needs any rehab, and if so, what will that cost? You should also find out a little more about the mortgage, ie interest rate, variable or fixed, does payment include taxes & insurance, origination date, etc. You want to make sure you don’t take over a loan and find out later on that the payments jumped due to a spike in the interest rate or even worse, that the note has a ballon payment.
But, from what you have posted, this may be a workable deal. It sounds like you could buy this “subject to” the first mortgage by coming up with around $4500 to re-instate the loan. Also, it sounds like the actual balance on the mortgage may be around $38-39K once the loan is reinstated. If the repairs are minimal, you could either retail the house to a home owner or sell it on a L/O to a tenant buyer. If you collected $2-3k down from the TB along with the first month rent, your out of pocket cash could be minimal.