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We're stuck on this one... - http://www.dealmakerscafe.com Forums

Original message

Al Jordan

"We're stuck on this one..." , Mon 2 Oct 14:38

Spoke with a couple yesterday about this house and we're a little stuck...
They've refinanced (ugh!) and payments are $2100 combined.
They owe $189K
House appraised at $180K
They're behind $1,050 (refin. payment).

They will be letting the house go into forclosure and won't be making any more payments. They are now moved into an apartment where they "plan to stay for the next year, save up another down payment, and start over."

So, if I take the deed I've got nothing to lose. I wouldn't record it until I had found a buyer, which I figure would take about 3 mo., and make up the $7,400 in back payments ($2,100/mo *3= $6,300 + $1,100 = $7,400 Total).

Three months later I sell the house 10% above market for $198K, L/P, with $9,900 (~5%) option consideration and a $2,500 lease payment. (Leaving $400 PCF)

Wheew. If you're still with me after all that let me hear what you're thinking.

I can't lose, but do I want to try?
Al

Also, if we should do this what's the best way: subject to, contract for deed, or L/P? "...because we want to qualify in a year for sure." They understand that any way we structure it they will be taking a chance at not being able to qualify. I explained the whole "every bank is different" thing.

I've always been a little hazy on how to structure it when the seller would like to qualify later. Can anyone whipe the haze from my eyes?

"When rejection loses its emotional charge you can function at your best"
-Azriela Jaffe

'If you lose $2 million on a deal you have a problem. If you lose $20 million on a deal the bank has a problem.'

Replies:

Al Jordan

"We're stuck on this one..." , Mon 2 Oct 15:08

I just got Bronchick's Legalwiz Newsletter (after I posted the above) and one of the articles is titled: Over-financed Properties. I didn't want to post the newsletter without permission from him, but check it out at: http://www.legalwiz.com

Thanks for the responce Al, I never would have found that link. Your a genius.

Anyway, if you read it let me know what you think. I'm open to any other ideas too.

Al

"When rejection loses its emotional charge you can function at your best"
-Azriela Jaffe

'If you lose $2 million on a deal- you have a problem. If you lose $20 million on a deal- the bank has a problem.'

Dealmaker
Moderator

"Strategies..." , Tue 3 Oct 07:05

AL:
Contacting the lender in 2nd position is the best idea I know of in these situations. It helps, when the seller has been late with their payments or the seller has called them and told them he/she can't make the payments any longer. Then you call the lender (holding the 2nd) and speak with the person with the highest authority (that's usually the tough part).

And offer to buy the 2nd before it goes into foreclosure. The person you're speaking to may not know what you're talking about.. that means you need to speak to someone else.

In your state, foreclosure is VERY fast and you may want to remind them that in as fast as 6 weeks the 1st Mortgage holder could have the property and leave them with nothing.

Dealmaker