Subject To? - Posted by Danny Teodorescu

Posted by Danny Teodorescu on August 20, 2003 at 10:26:55:

Yeah that seems to be the general consensus…to all that have provided me with their advice I would like to say thanks! I really do appreciate the words of wisdom…

Subject To? - Posted by Danny Teodorescu

Posted by Danny Teodorescu on August 17, 2003 at 21:30:19:

I have a lady that is about to be foreclosed upon. I am not sure of all the numbers but I will share with you what I can…(reason the numbers are fuzzy is b/c I couldn’t get to the courthouse on Fri and her stuff isn’t coming up online) She owes 102K on her home, has a 10K equity line and is 18K behind. I believe the house is worth between 130-150K. She wants to stay in the house. She says that she only needs 30 days, but the house is set to go on the block in 2 weeks. She has already tried to negotiate with the lender but they are not accepting, its all or nothing. I can bring her current and charge her a fee…and if she doesn’t have the money in 30 days I will get the house. Obviously that piece will be agreed upon before I bring her current. Question is how do I do that…do I use a “subject to” or do I have her somehow assign the mortgage to me? Also, what type of fee would be fair in a situation like this. Obviously I want to make something for my trouble but I don’t want any pictures of me with a black hat, cape, and a handle bar mustache surfacing on the internet :slight_smile: Thanks for the help (in advance :))

Re: Subject To? - Posted by Steve

Posted by Steve on August 20, 2003 at 10:14:51:

You will lose control of the situation if you pay any money so she can stay. It is HIGHLY unlikely she will be able to keep her committment to you despite what she says now. People like this will say anything to meet their goal of staying in the property.

When you try to evict or foreclose she will likely cry foul. After all she can say you are a big, bad investor that is only trying to remove her from her home. She can say she thought the money you put in was unsecured. You can look very bad in front of a judge.

For me its just not worth it to let a deliquent seller stay in the house.

Also, the deal is too thin.

Re: Subject To? - Posted by eric-fl

Posted by eric-fl on August 18, 2003 at 20:19:04:

Huh? I must have missed something here. 18k, to purchase 28k of equity, and she stays? Um, no. John’s post below is correct; she has to walk. You MUST not buy this house and lease it back to her - you won’t get a dime if you do. Also, how can she have a 10k equity line, yet be 18k behind? I’m somehow guessing that if she went to the lender to make a withdrawal on that line, she’d be declined. The only way I could see this deal work at all is if she really COULD get that 10k, and use it to pay down the indebtedness - although honestly, I’d have a pretty hard time coming up with the additional 8k for such a thin spread. It’s just not worth that much capital outlay. You’re not there to do anyone favors, you’re there to help, but only if it makes sense for you to do so. Don’t let her problem become your problem; after all, she’s the one who ran up that debt, not you.

Re: Subject To? - Posted by JohnP

Posted by JohnP on August 18, 2003 at 19:26:27:

Danny, if I put cash into a property I then want a deed? Tell her you can save her credit put she has to walk. She didn’t pay her mortgage do you think she will pay you? I think the deal is probably to thin anyway.