Posted by TRandle on January 09, 2001 at 19:57:50:
DEW,
Regardless of whether that was supposed to be “tickle” or “tackle”, the answer is yes, I’m still working it. FMV should be around 155k to 160k with some minor cleanup and repairs. I’ve now asked the sole lender to finance me 100% at 112k if I get an agreement from the seller for this agreed-upon short sale price.
I also gave them the alternative of a short sale at 100k if they won’t fund me so I can use my hard money lender. My HM lender turned down my request to just fund the assignment, so I need a purchase agreement. Now, unfortunately, the seller (with whom I was on good terms previously) hasn’t been very responsive lately.
It’s been a blast making ridiculous offers and asking for things I couldn’t possibly expect, yet I’m still in the game. If this all works out, I’ll have to do another success story. Thanks, and take care…
assignment vs. short sale - income ramifications? - Posted by TRandle
Posted by TRandle on January 07, 2001 at 13:19:29:
If I buy a 2nd Trust Deed for a discounted price through an assignment, will the borrower typically receive a 1099 for the discount, similar to a short sale? What are the differences, if any, between a short sale and a discounted assignment? Thanks in advance for all responses.
The borrower has already contracted for the loan. The seller of the note revises his figures when he sells for the tax due. You in turn pay taxes on the prorata interest you receive based on your basis which is the purchase price. You give him a statement each year(does not have to be a 1099) of interest paid as he originally amortized. Since you paid a discount you report more interest reflective of that discount.
If it were a short sale from a lender the seller would be hit with taxable income as the amount forgiven.
I should have given more details… - Posted by TRandle
Posted by TRandle on January 08, 2001 at 07:39:27:
Bud,
Thanks. My intent in purchasing the 2nd is to get my discount that way. If things go according to plan, that will knock 28k in principal and arrears off the deal so I can give the seller some funds and buy the place. Both the 1st and 2nd were in default and the 1st was foreclosing for the January sales.
The 2nd had not been notified and rejected my initial offer. I provided the 2nd with the information I had so they could cure the 1st, which they did. I’ve not done this before (obviously), but I assume I can just provide some sort of satisfaction of release document for the 2nd (which I will own) at closing when I purchase? Thanks, again…
You’ve lost me. The second brought the first current and is discounting the second to you??? Then what, you pay the second for the funds they paid to bring the 1st current and the agreed upon discounted amount of the 2nd, and you get the deed and the second assigns everythig to you? Why did the 2nd put up the $$$?
Re: I should have given more details… - Posted by TRandle
Posted by TRandle on January 08, 2001 at 15:33:47:
Dew,
Yep, you summarized it just how I understood it until today. I had semi-verbal agreement to purchase the 2nd for 20k plus the 7k reinstatement on the first. The 2nd was originally 44k with 4k in arrears and the 2nd had never received any payments at all. I guess their thinking was that they could buy some time and lessen their losses until they got a grip on the situation. But now it gets more interesting.
The 2nd called back today and now owns both liens. They didn’t just cure, they purchased the 1st. So, now the assignment of the 1st/2nd will take 105k. I’m trying to talk my hard money lender into backing me on the paper purchase. If I can’t get a purchase agreement, then I’ll own the liens and foreclose. If I can get the purchase agreement, then things will be much simpler.
I do my best to make sure I can always perform so I just want to make sure I have funding in place for the assignment if necessary. One way or another I’m going to find a way to get this house; either getting the deed and using hard money on a short sale or getting the assignment and foreclosing. I’ve only talked to private holders of notes before as opposed to an institution. I ain’t getting nuttin done this afternoon, but this sure is FUN!! My brain be tired trying to figure out all the possible entries and exits, but I be smiling. Take care…
So the 2nd squeezed you out to buy the first? And now they are willing to sell to you. So the ARV must be pretty high if you’re still going to tckle this one, huh?