Posted by Mark Haugsten on July 24, 2003 at 07:29:52:
Yepyep,
I was thinking conventionally, however, a hefty dp, with a high, high rate would be available to subprime applicants, you are correct.
The use of a subprime lender or instrument would also tend ot indicate to me that the lender may deal into this a discount on the 65K balance, which is what I wanted the article to suggest to Octavia.
If you can get that first note discounted to 35K there is an additional 30K for profit, repairs, and to sweeten the deal. The debtors’ credit is already dinged with this note, so any discount the lender may note to the credit report is, a) inescapable, a note is going to happen, b) not a result of the actions of the buyer, which can be important in a friendship.
1st Possible deal, Ed, Bill, Somebody…Anybody - Posted by Octavia-IL
Posted by Octavia-IL on July 23, 2003 at 21:15:16:
I have a friend whose property just went into foreclosure
she is 2-3 months past due $2200-$3300.
property bal: approx 64K
appraised val: $95K
she needs $20K to get out of a whole.
she has been trying to sell the property to her dad, but the title had a mix up. the title was still in her deceased grandmothers name, it was never changed when she took over. Now that has been straighted out, the lawyer has ordered the new title but has not received it as of yet. The corrected title was ordered approx 3wks ago.
If I was to pay her past due amount and get the financing for the appraised value, to allow her the 20k she needs that would leave me $11K. This is a family building and she wants to keep it in the family. Seeing as though her father was approved for the $95K, if I chose to sell it to him in 1 month, or sold it back to my friend in 6mons to 1y, would this deal be possible. I advs her If I can do this deal, and I have to keep it for 6mos to 1 yr I would have to get paying tenants in there to cover the mortgage.
Please help me I see potential for making a profit.
Of course I need to get financing myself first.
Re: 1st Poss deal, Ed, Bill, Somebody…Anybody - Posted by Mark Haugsten
Posted by Mark Haugsten on July 23, 2003 at 22:51:45:
Octavia
Go read Dwan Bent and Sharon Higginbotham’s article, “No Equity = Big Bucks”. Your friend is 1) late, 2) Needs repairs, and is not 3) not in an equity bind. 2 outta 3 aint bad, so I think the article may give you some ideas.
One question springs to mind. I noticed the numbers. $95K appraisal??? with payments of $1100?? on balance of $65K??? The payments seem overly high for any $95K loan origination. With TI added to PI that is still about 12%, isn’t it?? I don’t recall rates that high since Carter.
Something is not right here, and the Authority to Release the article mentions may shed some light on the incongruity.
Absolutely get title insurance, a survey, and YOUR OWN attorney in the mix, to protect you, with so many little landmines in this deal. ( Father interested, owner late, bank foreclosing, money figures a little hinky, Grandma’s ghost on the title, a diff party’s attorney running loose on the grounds, etc., etc. And to top it off, you are not experienced with ‘funny’ deals)
I think you are right, there is a pile of cash in there somewhere.