New game for me, Need some advice or opinions (long) - Posted by Mark-NC
Posted by Mark-NC on March 24, 2000 at 14:52:04:
A few months ago I had posted about a property that I had flipped 3 years ago. And the mortgage company called me and asked me If I wanted to buy it back because of a split of the marriage. At the time of the sale the appraised value was $72,000. The current note amount is $56,000. I have a second mortgage on the place for $5000. I made some good cash on the flip but in order to do the deal I defered payments on the second in lieu of getting my money if they refied or sold the property.
Anyway my original plan was to find the owners (the house is empty) get them to seperatly quit claim the thing over to me to save their credit and I was going to resell it again. To make a long story short they really didn’t care and then the wife took off, no where to be found, moved to another state.
So this brings me back to the Mortgage company. They were trying to find her too but couldn’t even with the sources they had. So the rep says to me “all we are looking for is some payments on this thing” why don’t you take over the payments? We will foreclose on it and turn it over to you after we do. My first response is, I dont want to make payments on this thing with no cash coming in, it could take 4 or 5 months. So the rep says, “Why don’t you rent it out for that time”? This floored me, apparently all they want is something coming in on this note. I told the rep I would be really nervous about doing something like that it just doesn’t sound right. The rep said it happens ocasionally and some brokers do this.
Anyway not thinking this is a good idea I asked her how much they would sell the note for and let me foreclose? Without a pause the rep said we would take 80 cents on the dollar for it.
That really peaked my interest, now I have a bigger spread and maybe they would even take less. I told the rep I was interested and would get back next week with an answer.
If I do this I would use hard money and I would also put about $4,000 into it to make it really desirable which would give it a FMV of $81,000.
The only problem is the holding costs on the hard money while I am waiting to foreclose. And I am wondering if I can get in there and do the work and clean up while I am waiting?
So what I am asking is, this is a new arena for for me and I am looking for ideas, sugestions,better ways and warnings from all that have ventured here.