Posted by Mark-NC on January 22, 2000 at 22:52:38:
Dave,
When I originally did the deal the husbands credit was not good enough to make it work. However in the note business one of the advantages is the fact that if the spouse has the better credit and can support the payments the note can be just in that name. The only thing is in NC although the husband wasen’t on the note by law he had to be on the Deed of trust.
In talking to the husband he has no problem of signing it over to me because he cannot afford it. As far as them going threw a divorce he said she just up and left and hasen’t heard a word from her.
As far as the note holder accepting it at a discount yes they probably would and I may consider it but In all reality I prefer not to run this thing through forclosure myself. It takes to long and it would have been so easy just to take over the existing financing. As far as your question about the taxes, on most note deals the taxes and insurance are very rarley escrowed into the payments.
My first flip I did 3 years ago comes back to me…But!! - Posted by Mark-NC
Posted by Mark-NC on January 22, 2000 at 16:37:24:
This is an amazing business, I knew that after I did my first flip 3 years ago that this is what I was going to do. In fact I quit my job after that And have been running ever since, flipping many properties using the note business as a tool.
So here is what has happened. The first one that I flipped I made a $9000 cash profit plus I ended up with a small second mortgage. Now I made arangements with the buyers that they did not have to pay me on the second unless they either sold the property or refinanced it. So, I was not getting any cash from the second mortgage right away. My second lien still exists on this property.
Well a couple of weeks ago I get a call from the associates ( the mortgage company that ultimately ended up with the note). The represenative from associates asks me If I wanted to buy the house back because it is in default. In further talking the rep said that the home was emty as a result of a marriage split up and the mortgage was 4 months behind. I said well I really didn’t want to pay cash for it but I would be interested in taking over the loan if they would put the back payments on the back end of the loan. Without hesitation the rep said that would be fine.
The property appraised for $72,000 when I flipped it and it currently has a $52,000 mortgage on it. So I could literally take this thing with no money down. There is however one years back taxes of $490. that I would have to pay, no big deal.
Now for the problem, I am thinking to myself sweetdeal. I will find the owners and get them to quit claim it to me. Neither one of them want the home so it souldn’t be to hard to get it done convincing them that a forclosure will not be pretty on their credit report. The only thing is the wife has disapered off the face of the earth and no one seems to have any idea where to find her. So I am stuck, anyone have any ideas? It may have to go to forclosure if I can’t find her.
Re: My first flip I did 3 years ago comes back to me…But!! - Posted by John P.
Posted by John P. on January 23, 2000 at 23:59:29:
Mark,
What will the property rent for? I would see if it would give you a decent cash flow and rent the heck out of it, you only need to put in a couple of hundred bucks.
From the information in your post, I assume that the husband is still available. Has the couple gone through divorce? If so, what was the disposition of the house in the divorce settlement. If the husband got the house, then the wife may have given him a quit claim deed. If so, the husband alone can deed the house to you.
Does the husband have a general power of attorney? My wife and I have exchanged powers of attorney as part of our estate planning. If the husband has his wife’s power of attorney (and it’s recorded), he can deed the property to you for the both of them.
I don’t understand why the note holder asked if you want to buy the house. Has the note holder accepted deed in lieu of foreclosure? Have you considered asking the note holder to sell you the note at a discount? In the worst case, you foreclose on the first and second notes and take title to the property that way.
Also, why are the taxes in arrears? Was there an escrow account for the first mortgage loan? If so, why isn’t the tax bill being paid by the note holder from the escrow account?
Re: My first flip I did 3 years ago comes back to me…But!! - Posted by Warner(Atl)
Posted by Warner(Atl) on January 22, 2000 at 18:31:14:
Mark,
I am guessing that NC has a relatively long foreclosure timeframe, otherwise why don’t you take it thru foreclosure so you can clean title (assuming their maybe other liens). You may want to spend $40 bucks for a skiptrace on the wife to see if you can get a current address. TRW has a service available on their website.