Need some help in New York - Posted by JJ

Posted by JoeB(Atlanta) on January 30, 2000 at 14:27:16:

Jeff, you could buy the house ‘subject-to’ the 1st mortgage (of $95k balance + arrears/back pmts and penalties of say $9000 = $104k) and give the extra $1000 equity to Seller for grand total of $105k asking price. You will have to come up with the cash for the equity and arrears of course. You can have Seller or your attorney call and ask what the exact reinstatement amount is (they’re free to tack on lots of penalties and admin fees to the 6 months delinquent, that’s why I bumped it from $6000 to $9000).

You close it, and you own the house, seller’s name is still on the loan, you make up the back pmts and help Seller’s credit, and you start making the monthly payment.

I’m assuming the house is in good shape or if needs repairs you’ll factor that into the equation with your profit.

Hope this helps,
Joe Brillante

Need some help in New York - Posted by JJ

Posted by JJ on January 30, 2000 at 14:09:34:

A friend of mine found a property that looks like a good deal. He has taken it to his lawyer, but the lawyer told him that the bank would require to much for a down payment.

I am new to real estate investing, but believe this deal could be done creatively.

Here is what I know:

Owner is 6 months deliquent
Monthly mortgage is $1000
Comps in the area are $145K
Owner wants to sell for $105K
Mortgage on the property is $95K
The bank has not started foreclosure proceedings yet.

What options are there?

Please help me, I believe this could be a great deal but I don’t know how to proceed. Any help would be much appreciated.


Re: Need some help in New York…food for thought - Posted by kf_az

Posted by kf_az on January 30, 2000 at 14:39:00:

First of all, how does the lawyer know what the bank is thinking? Also, since they haven’t even started the foreclosure process, it’s the owner’s house to do what he sees fit. It’s the owner’s house until the foreclosure sale. So, what I would do…find out through the owner what amount it will take to bring him current. 6 months of payments plus penalties, etc. Get a contract together with the owner of the house stating that you will buy the house “subject to” the existing financing. You will most likely have to come up with the reinstatement amount(the amount to bring him current) and closing costs. I would also try and negotiate an even better purchase price, like 100k. This would still put 5k in his pocket. So, the way I see it, you can get into this deal for 5k(to seller)+10k(reinstatement plus closing costs)=15k. By the way does it need any fixup? So, if by investing 15k to yield 45k gross profit in less than 6 months is “too much money down” for you or the lawyer to handle…e-mail me off line and I might be interested in the deal. Good luck either way. Do your homework(which there’s alot of things you need to check out) and go for it. I would get the property under contract immediately with enough contingencies to make you feel comfortable. i.e. purchase subject to property appraising at “x”, free and clear title, home inspection to verify any potential major fixup, etc. If the deal turns out to be not such a deal…you’re out of there. By the way, if the lawyer won’t structure a “subject to” contract, get another lawyer or better yet, just do it yourself.
This is just what I would do…others on here I’m sure will have additional food for thought. Again, good luck.