Help on deal! - Posted by Don

Posted by js-Indianapolis on October 28, 2003 at 10:46:22:


Find the right mortgage broker, and you can refi a sub to. But no, not immediatly for 25K more than purchase. Well, not legally anyhow.

Help on deal! - Posted by Don

Posted by Don on October 27, 2003 at 19:24:55:

Someone came to me with this one to possibly partner up on. Here’s the specifics:

Owes: $127k
Worth: $200k
Monthly: $1100 @ 10.8 ARM
Arrears: 4 months and $2000 back taxes

She wants to stay in her home that she’s lived in for 30 years. She is in this situation because she was out of a job for 6 months (teacher) but now is working again. She can’t afford to make up the back payments though, even with the offer the mortgage co gave her.

The investor that came to me with this one proposes the following:

Have her deed her property over to us.
Bring mortgage current and refi @ %7 (is this possible if not pri residence?) on $160k which would pull out about $25k for us.
New mortgage + taxes would be about $1230.
Enter into a lease option with current owner for that amount monthly for 24 months at $160-170k.

How does this sound? Any other suggestions on this one? The owner really wants to stay in this house. Would we run into any extra problems with this, say if we needed to evict…maybe it’s harder because this was her house from the start?

How do we have her deed us property? Quick claim…subject to with warranty deed??

How much would this cost us in closing fees, etc…

Re: Help on deal! - Posted by js-Indianapolis

Posted by js-Indianapolis on October 28, 2003 at 10:44:54:

Here’s a few thoughts. Yes, I’m harsh. First read this:

Next, do as the other poster suggested, search for lease back. Not something looked highly upon.

Then, forget this “deal”, unless the lady moves. She didn’t pay before, but it’s all better now, right? Yeah, right, I’ve never been told that by everyone in foreclosure. BTW, they ALL want to stay in their house. Thus, why the bank is having to foreclose.

Another thing, if you’re talking about quick claims, you need to know more before investing in foreclosures. Maybe investing altogether. Sub to with warranty deed? If you want to pull that off properly, there’s about a dozen or more documents you need. Not something you whip together from random contracts online. Well, not if you want the thing to hold up to anything. Think I’m paranoid? Go ahead and whip some contracts up from what you can find, and then trust that for the next 2 years, everything will go smooth.

One last thing. I don’t know where you’d find a mortgage broker to allow a refi on a new purchase, allowing you to pull equity out without any seasoning. The old trick was to have the seller write up a land contract, and date it a year ago, so you would look as if you had owned the place for a year. FRAUD! Don’t mess with it, no matter how many times, your “partner” tells you "who’s gunna know??

Back to this partner, does he need to use YOUR credit for this deal? Why do I get the feeling you’re in this for one reason, to get taken? Why wouldn’t you leave the equity in this deal, and get it when the lady exercises her option? Maybe because he won’t be around then? If it’s such a good deal, why does he need you to come to the table? What do you bring that he doesn’t have? A quick claim?

I?d run from this deal, and this guy.

sale and lease back - Posted by Doug,ky

Posted by Doug,ky on October 28, 2003 at 09:08:54:

I suggest you do some research here on this site with regard to the problems with doing this! Sounds great but you could be in big trouble when it goes sour.

Problem is when your teacher misses a payment and you evict or she can’t excute her options she is going to a lawyer and he’s going create all sorts of greive especially if she says she didn’t know she sold the house. This esculates from there. Like breaking state usary laws. Loosing all your invested money. Like I said check the archives!


Re: Help on deal! - Posted by dk

Posted by dk on October 27, 2003 at 23:11:41:

I’ve never heard of anyone being able to refi a house they took subject to