Posted by Bill Jacobsen on June 08, 2007 at 19:36:34:
Sure, these are possible deals. Obviously the 2nds are going to want something to walk away. The 2nd on the 2nd deal should be easier to deal with because it will be easy to show that the house is not worth more than the 1st mortgage. Of course, the the holder of the 1sts won’t want you to pay the 2nds anything until they get a full payoff.
I don’t use the formula you mentioned, probably because I never find deals that good. If I were using that formula it would be about ARV X 78% - repairs or something like that. I make adequate profit. Using the 78% I get about $177K and $128 as maximum offers.
Be sure to beat them up on the current comps and repair costs. Good Luck.
I am not new to this newsgroup but I have not been here in quite sometime. I have been so busy with so many things other than real estate investing. I am excited to be back. This is the Greatest Forum on the Web!
I have some questions that I hope some of you could help me with. In the last couple of days since I started up the marketing machine again I have had a couple of calls that may be possible short sale candidates. I need some advice from you experts please if these are deals and what the chances might be in these situations of obtaining a short sale.
Needs cosmetic fix up of Approx: $8k to $10k
Couple is going through a Divorce. Property has been Vacant about 4 months.
Auction Scheduled for 8/31/07
If I use the MAO offer. I need to get this property for about $160K ($240K x 70% - $8k = 160K) What about the 2nd Mortgage do I ask them to take the biggest hit and ask the first to take the rest to make it to a possible $160k Purchase Price? Will a 2nd mortgage take such a reduction?
2nd Case:
ARV $175K-$180k
Total Loan Amounts: $222k
1st Mortgage: $180K
2nd Mortgage: $42K
7 Months behind on Payments of $1600 a month. Property is Vacant.
Repairs $8k-$10k
Again MAO ($175k x 70% - 10k = $112k) This would completely wipe out the 2nd and half of the first mortgage.
Auction Scheduled for 8/1/07
In Both Cases it is the 1st Mortgage Holder who started the Foreclosure Process.
Thank you for any advice! Are these deals worth pursuing? Are they deals at all?
Thank you in advance for any responses! I am very excited to be investing again.