Posted by Ben in Ohio on April 18, 2000 at 08:15:52:
John–
Presently I have a deal just like this. Seller owes $109 + 2K in taxes. Has signed a contract to sell for the amount owing, $109. Property will appraise for $129. Mortgage company is aware of my offer. Does this knowledge of my purchase preclude me from taking property subject to? It is not assumable. Does the LAnd Trust conceal the “assumption” by me? And what is my recourse if the bank calls the loan, simply re-fi? Thanks
1st preforeclousre need help!!! - Posted by Joe
Posted by Joe on April 17, 2000 at 22:15:21:
Details:
House is worth 85K and has a 1st deed of trust for 66Kwith about 2K in back payments. needs carpet and paint on the interior about $2500.00 total in repairs. Owner would like atleast 10K of her equity.
How do I structure this offer? Do I go subject to or lease option the house or somehow subordinate their equity?. I don’t have any money to do this deal and I need some ideas.
Thanks,
Joe Roberts
Re: 1st preforeclousre need help!!! - Posted by JohnB_NJ
Posted by JohnB_NJ on April 17, 2000 at 23:02:57:
Joe,
From you post I see that there is only around 15k in equity in this house. So, I don’t see much room for your seller to get atleast 10k of her equity. Let’s for a minute assume that she put it up for sale with a Realtor. Now she would have atleast 6% commission or $4 to 5k. Since she is facing foreclosure and it needs some work, she will have to list it under market value to attract a quick sale and this would reduce her equity by another 5 to 10 grand. Not to mention her closing costs So, there isn’t much left of “her equity”.
I did a similiar deal 2 months ago. I brought the mortgage current and gave the owner 1k of her 20k in equity. She was about to lose all of her equity and her credit to boot.
Besides, I have found out the hard way, that the first 10% of your profit is “air”. Meaning, holding costs and various other costs you forget to factor in.
So, Joe, this is a perfect “subject to” deal. Bring her mortgage current and maybe give her alittle “walking money”. Take title in a Land trust (see Bronchicks articles and website, www.legalwiz.com) and maybe sell owner financing on a Land contract with a wrap mortgage or lease option.
Let us know how you make out.
-John
PS: don’t forget to have the title check after you get it under contract. She might have other liens and judgements on the house.
Re: 1st preforeclousre need help!!! - Posted by Joe
Posted by Joe on April 22, 2000 at 13:07:56:
Thanks for the advice.
I offered them an option and explained the issues with them wanting to net 10k. The husband understood but the wife is holding out for her equity. Guess someone will buy it on the courthouse steps. I gonna keep contacting them as well.
Thanks again.
Joe