Posted by michael on March 11, 2004 at 08:58:02:
Should say “by the time you get the financials from the SELLER”.
PRE-FORCLOSURE DEAL DESPERATE FOR ADVICE!!! - Posted by ArtV
Posted by ArtV on March 11, 2004 at 08:15:26:
Does anyone have an idea or thought on this setup:
I have a woman who is losing her house in a few days. It is a pretty good looking house in a nice area. Needs just a little repair and a little updating 5k max if that. The woman has a 1st mortgage of 127k she is 20k in arears. The value on this house is about 160-165k. She is willing to just deed the house to me and the bank is willing to workout a payment plan of 2,000 down now and 1500 for the next 6 months. After the 6 mths they will modify the mortgage to a fixed rate loan of 6.5% and include any arrerage in the loan amount.
I dont know how to setup this deal without using my cash. I was thinking I would pay the 2k to start a payment plan (after the lady puts it into a trust and assigns it to me) and I will need to get a lease/option buyer in the house with a downpayment of at least 3k (2k for bank,1k for woman moving out)that doesnt include any profit for me. Also the taxes on this house are 3400/yr between the tax,insurance,and payment I am looking at about at 1250/mth payment not including my profit yet. If i add a profit of 200 i’m looking at a payment for my buyer of 1450. I dont know if this is worth putting up 2k for a possible dp profit and a 200/mth profit and a large cashout at the end IF my tenant buys the house. Any thoughts would be appreciated.
Oh PS. I have another deal very similar to this one so the same idea may work on that one too.
Re: PRE-FORCLOSURE DEAL DESPERATE FOR ADVICE!!! - Posted by ArtV
Posted by ArtV on March 11, 2004 at 11:36:04:
I made a mistake the value is not 165 it is 170-175k
typing error!
Re: PRE-FORCLOSURE DEAL DESPERATE FOR ADVICE!!! - Posted by michael
Posted by michael on March 11, 2004 at 08:39:56:
Lets see:
127K plus 20k plus 5k equals 152K
152k of 160k is 95 percent. Do you think this is a deal buying at 95% of ARV?
Adding two hundred bucks on top of a mortgage payment is not “profit”. If you could get a buyer to pay that, it is simply cashflow which may or may not end up as profit after the house sells or doesn’t sell. Does the neighborhood support 1450 bucks a month for similar houses? That’s what you need to know.
Art, the way to do this properly is have this stuff figured out beforehand. You need to have parameters for what is a deal and what is not, so by the time you get the financials from the buyer, you can tell at a glance whether it’s a go.