Posted by Tim on April 11, 2007 at 11:07:12:
Why are you dealing in such small margins? You need to think bigger in my opinion. What about fix up costs, holding costs, utilities… and all of this rides on the fact that the FMV is 128K and that you could get that price once it sells not to mention realtor fee’s Closing costs and the like.
One little misstep and you will be losing money.
I would not do this deal and focus on deals that have a much bigger equity stake to work with.
Tim - VA
Is there a deal here? - Posted by Apollo
Posted by Apollo on April 10, 2007 at 15:36:19:
I have a borrower that is in foreclosure on her home. She just wants to walk away from it, and is willing to sell it to me Sub2. The property is worth basically the $128k that she owes on it. She told me it would take about $5k to bring the loan current. My plan was to bring the loan current, and then either do a l/o or rent it for a couple of years.
After speaking with the Loss Mit rep, the amount to bring current is about $9k. This definitely changes the deal for me. I then considered doing a short sale, but the lender requires the house to be listed for 60 days before they will consider a short sale.
So what should I do? Should I have her list it for 60 days, and then do the short sale if it doesn’t sell? Or should I just walk away? Is there a deal here?
I would appreciate anyone’s help. Thanks in advance.
Here’s the rest of the story - Posted by Apollo
Posted by Apollo on April 11, 2007 at 10:16:59:
Thanks for everyone’s input. In my original post, I left out a few details. There are actually two mortgages on the property that make up the $128k. The 1st is $98k, and the 2nd is $30k. She’s only one month behind on the 2nd, and not in foreclosure.
So, would it make sense to approach the lender for the 2nd and ask them to discount their mortgage? Would they even go for that if they haven’t begun the foreclosure process? I’m thinking that if the lender for the 2nd would take $10k or less to satisfy their mortgage, than I might be back in business.
If the 2nd lender goes for it, how do I approach the 1st lender? Do I offer to purchase at $98k, and ask them to forgive the $9k in fees?
Let me know what you think. Thanks!
Re: Is there a deal here? - Posted by Greg
Posted by Greg on April 10, 2007 at 16:41:01:
I would walk. I cannot see a deal here. She owns too much for what it is worth. Plus the 9K.
Re: Is there a deal here? - Posted by george
Posted by george on April 10, 2007 at 16:08:55:
You certainly don’t want to pay above FMV on a Sub2. There are too many properties out there with equity.
Why hasn’t she listed before this? Then wait and try for a short sale? Too much hassle. There are simpler ways to buy properties with equity in today’s market. Particularly via Sub2.
george