!!Discounting reinstatement amnts @ 11th HR!! - Posted by SB Wells (NY)
Posted by SB Wells (NY) on September 19, 2004 at 22:12:32:
I’m a newbie investor working on a deal. The homeowner is facing an auction in a FEW days! Based upon the payoff and/or reinstatement figures that I received the deal is a SHADE THINNER then my profit target . My plan was to bring the loan current and purchase the property subject to the existing financing.
For point of reference:
The underlying mortgage is $240k
The amount of arrears required to reinstate the loan is $40k ( Interest included in this amount is approximately $25K).
Consequently, the total amount due the bank is $280K.
The homeowner will accept $3k for the keys. Therefore, the total purchase price before acquisition costs (i.e. transfer taxes, attorney’s fees etc) is $283K.
The FMV of the property is approximately $350k - $360K
1)Has anyone had any success discounting either the payoff or reinstatement figures just before the auction occurred?
(BTW, The foreclosure process has been going on for approximately 18 months.)
2)Is it at all possible to be straight forward with the bank and tell them that I want to buy the property subject to the existing financing but I need a discount to make the deal viable? If I make this request and it is denied have I jeopardized my opportunity to work a “thinner” subject to deal? (Please note that the subject to deal is especially appealing since I don’t want to be personally liable for the mortgage or any financing related to this deal.)
- Assuming the discount is not available, Would you do this deal or is it TOO THIN?!!
All insights and experiences will be greatly appreciated.
SB Wells (NY)