Posted by Brent_IL on March 28, 2002 at 23:18:00:
I would bet that the offers were over the telephone. Sort of a bait-and-switch to get in the door.
If the bank waives the $20K arrears and you refi the $256,000 at 7.00%/360, the property rent minus expenses is still negative.
I don’t think this property is going anywhere for a while. If I wanted to make an offer, I would look for a high-income, highly taxed, passive investor as a partner to cover the negative until rents catch up.
“Dr. Heart Surgeon, I understand that more taxable income is the last thing you need. You can own 50% of this wonderful $300K house for only $10,000 (your initial profit) plus transaction costs. Your monthly payment is only $500.00 a month. Almost every penny of this is deductible, and management is in place (you). When the property is sold, your profit will be taxed at the lower capital gains rate. Press hard, there are three copies.”
At this point I wouldn’t be offering the seller any cash because there is not much play in the deal. The bank will give it to you cheaper after the foreclosure.