RERookie,
If you are looking for someone to agree with you, that this is not a deal, as it is presented, then here ya go.
I agree.
However, what happens if the house does not sell?
Have you asked the seller that?
Can they close on the other house, if this one is sold?
Buy it subject to, with her covering a couple payments, and get a buyer in there.
Otherwise, don’t waste your time, and move on.
This might even be too skinny to buy at all, I don’t know your market.
Posted by RERookie on August 11, 2003 at 19:33:13:
…that there is NO deal here:
3/1, comps at 80-83
1st mort: 65K
2nd mort: 11K
Payments are current. Owner NEEDS to be “out of this home” by the end of the month so she can move to a new home (FHA).
She said that there were people interested in renting it, but she’s leery about that because “she’s a single mom”.
She said she was told that she could carry over 6-7K of the 2nd over into her new loan, so her bottom line is she “needs” 70K - to pay off the 1st and knock 5K off of the 2nd.
My only exit strategy here, with my CURRENT circumstances, was to try to negotiate as good a deal as possible, and then assign my position to another investor. But with the thin spread between what she “needs” and FMV, I don’t see a deal.
Had I been a little further along in my efforts, I would have a buyers list (retail; I have a wholesale buyer list). Then MAYBE I could try to work a l/o, since she mentioned renting it out and only stated “being a single mom” as a deterrent from going this route.
I ruled out trying to get either one of the mortgage holders to discount their loan, because she’s current, so I figure what’s their motivation to do so? It’s not like a preforeclosure and she’s behind in payments.
Any thoughts are appreciated. I just want to confirm with the pros that my thinking is not TOTALLY flawed. And if there is room for a deal, how?
Posted by Brent_IL on August 11, 2003 at 20:48:35:
If I got this right, the loan for her new house is in place, so she doesn’t need money for a down payment, commissions, to buy-out the second, or anything else that’s relevant.
What she needs is mortgage relief.
You have two weeks to run a newspaper ad at $85,000 offering 100% financing with a CFD buyer’s contribution toward closing costs. Closing costs are what you make of them.
I wouldn’t mess around with a L/O; I’d go for a straight subject-to purchase. Since she has already notified the note holder that she is moving, have her deed it to a land trust beforehand, so they don’t call the second. Get a lawyer and read the notes.
It’s pretty much a no-money-down deal if the resale works out. As long as there is a spread between her payments and the payments coming to you, there is some money to be made if your liability is contained and the expenses of ownership are passed on to someone else.