Posted by Bud Branstetter on May 03, 1999 at 23:44:58:
Does the 461/mo include first and 2nd? Attack the second if he is in danger of losing by the first foreclosing. That is after you have the deed signed but before you record or pay out money.
Once the 1st has a deed in lieu of he has right to possession. He likely will not foreclose on the 2nd. Although, I would not record a deed in lieu of and foreclose anyway.
On the sale end why not advertise as owner financed. If they don’t have the 10% down ask how much extra a month they can pay until they make up the 10% down.
It seems uncomfortable because it is skinny. Wouldn’t it be nice to be doing if there were another 5K or so in equity. Don’t put out money until you see inside. Yes, you are doing him a favor and go ahead and be embarased by asking him to pay something into the deal. The worst he can say is no and the worst you can do at that point is buy with the risk to lose a few dollars or make a few more.
Help!! Is this worth it??? - Posted by Kevin(OK)
Posted by Kevin(OK) on May 03, 1999 at 20:26:19:
This is a continuation of the “L/O on a Wrap” post I made several days ago (thanks JPiper and Bud Branstetter for thier suggestions). With further research, I was able to determine that the wrap around mortgages have been moved to first and second positions (the underlying loans have been paid off). OK, here is the deal. Owner is 3mos. in default (payments $461), so I will have to make up $1383 back payments. The renters have been removed (they were paying $500 mo.). Loan balance’s total $35,000. The owner will sign it into a Land Trust, and I will take over the payments (FMV is $38,708). My plan is to sell on a 1 yr. L/O for $41,000 / $2050 opt. cons. / $525 mo. / $50 rent credit and the buyer makes any necessary repairs (I haven’t seen the inside of the house yet).
My slim profit: $667 up front, $54 per month ($648 yr.), and $3,900 on the back end for a total of $5,215.
Worst case scenerio is that I can’t find a person to put down the option consideration. In which case, I would have to rent it with $0 cash flow (I will have holding costs on the $1383 I use to make up the back payments).
Is it insane to ask the seller to chip in some on the back payments to save his credit. He is ready to give the holder of the first mortgage a deed in leau, but the second mortgage is held by a different party, so he will still face a forclosure, right?
The deal doesn’t feel very good the way it sits. I will go take a look at the house tomorrow, and meet the owner.
Any suggestions would be appreciated.
Thanks!
Kevin(OK)