Posted by WilliamGA on April 25, 2000 at 21:48:03:
Posted by WilliamGA on April 25, 2000 at 21:48:03:
Exit is complete on my “subject to” pre-forclosure deal…Here’s the story… (long) - Posted by JohnB_NJ
Posted by JohnB_NJ on April 25, 2000 at 21:22:04:
Hello fellow CREonliners,
I wanted to post a brief rundown of one of the best deals I have completed to date.
I got a call about this property from back in January. The woman that called me said she saw my advertisement in a local paper and wanted to know more. After speaking to her for a few minutes and building a repore with her, she told me she wanted to sell fast because she was 3 payments behind. I just shut my mouth and let her talk. She told me she wanted to move in with her sister and be rid of the monthly debt. She said, "I just want to get what I paid for this house. I purchased it for $86k 3 years ago and I purchased it as a bank foreclosure. I am 4 payments of $975 behind. Can you help me?"
Of course I knew I could. I knew the neighborhood and I knew from her description of the property that is was worth 115k or better. So, I hightailed it over to her house and after an hour or so and a few sodas, we penned out a deal that worked for her and for me.
I told her that I would bring her payments current ( I borrowed the funds from a credit card cash advance at 3.9% with no fees!) and purchase her home for %86,000 (that is the price she named)and what ever the differnce is at closing between her loan balance (plus bringing the payments current) and the purchase price was the cash she would receive. I told her that I would be taking over her loan and it would remain in good standing and her credit would improve because the payments would be ontime but the loan would remain in her name. That was OK with her. No objections.
I had my title company do a title search (came up clean) and transfer the title into a Land trust which the seller than transfer her benificial interest to me for just over $500 (which was the money due her). I used Bill Bronchick’s land trust docs (which my attorney looked over and said, "Looks good… and my title company said, "sure, we can insure your title in this Trust). Again, the seller had no objections to placing title into a Land trust and selling me her benificial interest. She was motivated to be rid of the debt and sell the house…
OK…whew that was long…
Now, I immediately listed it with a realtor (of course I excluded myself from the listing so I could sell it myself). While my realtor was marketing it so was I. I advertised “Seller financing at a price of $118,000”. I received calls but the calls didn’t pan out but in the mean time my realtor got it sold for $115,000 in 25 days. We closed today. I did have to make a payment for Feb, March and April but that’s ok… I planned on that and had the cash available.
So, if I subtract 6% commission, $82k loan payoff, 3 months of payments, 3 months of back payments (plus late fees), $500 to the seller, my title insurance on the buy side, my closing costs on the buy and sell, transfer tax, and other various closing fees from $115k that comes to …
cha ching… $18, 755 …
Oh, geez, I forgot…I have $695 sitting in the escrow account at the mortgage company. Sure glad I have a power of attorney signed by my seller giving me permission to cash any checks from the mortgage company or insurance company… so really my profit is … $19,450…
So, thats that deal in a big nutshell. Sorry about the length of this post. If anyone would like more details, please feel free to post or email me directly.
I just wish I could have found a buyer before my realtor did, I wanted to do a Land contract with a wrap around mortgage. I wanted 12k down and collect a nice spread. Oh well, maybe next time. On to the next deal…
Thanks CREonline and to the many people that post here.
PS: Did I worry about the DOS monster…Heck no…
Re: Exit is complete on my “subject to” pre-forclosure deal…Here’s the story… (long) - Posted by keithCA
Posted by keithCA on April 27, 2000 at 13:50:11:
great job…need more details…thanks
John, Congratulations on a well done transaction!! (NT) - Posted by Jim Kennedy - Houston, TX
Posted by Jim Kennedy - Houston, TX on April 26, 2000 at 17:08:14:
Re: Exit is complete on my “subject to” pre-forclosure deal…Here’s the story… (long) - Posted by Leatha
Posted by Leatha on April 26, 2000 at 09:54:43:
Great Job JohnB! You kicked butt and took names! As an aside though, just in case you don’t want to wait another 25-30 days on your next deal. There are still loan companies that will do “no seasoned refinancing”. Immediately after the seller “deeds” the property over to you (hopefully at a proper closing), the loan company can close in approximately seven days. Once upon a time not so long ago, loan companies doing no-seasoned refi’s were abundant. Due to the change in the non-conforming mortgage industry they aren’t as abundant as they once were. But they are out there. It may require a little research on your part but establishing a relationship with one of those companies can assist you in realizing your goals quickly–not to say that you can’t handle it without them anyway.
Glad you got this one sold John. Way to go! nt - Posted by Jack KY
Posted by Jack KY on April 26, 2000 at 09:39:30:
Re: Exit is complete on my “subject to” pre-forclosure deal…Here’s the story… (long) - Posted by Bill K.- FL
Posted by Bill K.- FL on April 26, 2000 at 08:05:29:
Great going John. I’m printing this out to keep as a good reference for future deals. A couple questions. Did you have to get your own insurance policy when you bought or were you able to transfer the sellers policy?
And I assume the reason you couldn’t sell on your own was the lack of buyers with 12K cash available to buy. Is that correct?
Re: Exit is complete on my “subject to” pre-forclosure deal…Here’s the story… (long) - Posted by Zee
Posted by Zee on April 26, 2000 at 24:05:10:
What marketing strategies were your using at the time which promted her initial and subsequent interest in talking with you?
Great going John! Nice deal. (nt) - Posted by HR
Posted by HR on April 25, 2000 at 23:05:44:
Re: Exit is complete on my “subject to” pre-forclosure deal…Here’s the story… (long) - Posted by JoeKaiser
Posted by JoeKaiser on April 25, 2000 at 23:00:12:
Nice going JohnB!
That’s they way to hustle.