Have First Deal - Need Info on Financing - Posted by Elizabeth

Real Estate Investing Real Estate Law
1

Posted by Ronald * Starr(in No CA) on July 09, 2003 at 19:54:59:

Elizabeth--------

There are a couple of considerations here. If the property is in good enough shape that you could resell it to endusers quickly, I’d suggest you not get new financing. Just pay to bring the current loan current and resell before they can foreclose on you due to the due on sale clause. If they don’t even try to enforce the due on sale clause, all the better for you.

You don’t mention whether you could pay the loan arrearages on your own. If you can, fine do it. If you can’t, perhaps you can borrow that amount of money from somebody that knows and trusts you, secured by a second td or mortgage against the property or against some other property that you own.

While you say you can get the lender to take less of a payoff, I really wonder about that. They are owed $160K and the property is worth $250K. I see no reason for them to do a short sale. They can go ahead with their foreclosure and either get bought out at the auction or else end up with a property upon which they can make a profit.

I’s suggest not pursuing that route unless the lender has already agreed to it, in writing.

Good InvestingRon Starr****

2

Have First Deal - Need Info on Financing - Posted by Elizabeth

Posted by Elizabeth on July 09, 2003 at 17:56:25:

Hi, I’ve been reading these postings for a while, and now I need help. I’ve posted this in several areas of this site and apologize if I have violated any standard or rule by doing so.

I have a great deal which fell into my lap. A woman I know just wants to give me her property. She’s had 3 bankruptcies to stop the foreclosure sale, the last case dismissed (bankruptcy is my speciality by the way so there’s no question that I understand the process involved). Let me also state here that this woman is not my client. Anyway, she doesn’t want any money from me, just wants out. She owes about $160,000 on existing mortgage. I had a local realtor I know do a market analysis & the property came back valued at $250,000. I know I can cram down the payoff figure & get the lender to take less approx $120K and, even after expenses, can cash out a significant chunk on this deal.

I’m meeting tomorrow with the owner and she will sign over the deed to me which I will immediately have recorded at the county clerk’s office.

The problem is this: My personal credit sucks and altho I know mortgage brokers, the truth is that noone will give me a mortgage based on my credit history.

So, how do I finance this purchase very quickly, keeping in mind my credit, and cashout the profit for myself. I know investors who will pay me $5K if I turn over good deals to them. But I keep asking myself, why should I take $5K when I know I can make $50K or more out of this deal.

By the way I have the CS course, think it’s great and believe that like anything in life, if you don’t keep trying, you’ll never if you can succeed.

Any response, help, suggestions would be appreciated, especially since I have to close very quickly. This is my first deal.

Thanks.