I’m out of my comfort zone!! Need help!! (Long) - Posted by Mike O
Posted by Mike O on March 16, 2000 at 17:16:27:
I called on a property and got a lead from the agent on another property. Here is the deal:
4 units/2 stores
Bank mortgage 160K
Vacant-rehab was started, about 60% finished-owner is in foreclosure
Still needs about 50K work
The deal is in New Jersey
Now my situation,agent told me the bank is willing to sell the mortgage for about 40K cash. I made an offer, agent told me the offer was no good, the bank was selling the mortgage, not the property. Agent stated how the deal will work, I purchase mortgage, subject to inspection of mortgage docs. He will then put me in touch with the lawyers that are foreclosing, and they will tell me how much longer it will take to foreclose on the property. The bank will not bid at sheriff sale. There are no tax liens, and I am getting a preliminary title search done.
Now this is where my comfort zone is out the window, if I understand this deal as stated.
If I buy the mortgage, the bank will complete the foreclosure, drop all legal fees. Property will be subject to bids at sheriff sale.
I called some investors to do a quick flip, I have an interested investor for 65K. But I cannot assign what I don’t control.
Now the questions
If I own the mortgage should I let the bank continue with the foreclosure? They will be foreclosing on the previous owner. Can I flip the mortgage to the investor, and let them go to the foreclosure process with the lawyers?
Who will set the opening bid price at sheriff sale?
Do I have to buy the mortgage, foreclose, then flip? Or is there another way to go about this. The bank will close in 30 days (with me), Can I assign the mortgage at that time?
I have talked to my brother who is a tax assessor for another city, and he gave me all the worst case scenarios, leins, insurance, fire, and the like.
This is my first attempt at a wholesale flip, I can get the cash, but need some guidance from anyone who has done a deal like this before. I’ll be talking to my lawyer over the weekend to see what he thinks.
Thanks in advance for any help, pro or con.