Posted by Tom (MI) on August 18, 2003 at 09:19:08:
Check to see if there is a redemption period. In Michigan, they can go to sale within a month but there is a 6 to 12 month redemption. If the redemption period is long enough then you won’t have to bring the loan current then make monthly payments. The problem is if the house doesn’t sell before the redemption period than the bank will get back a fully rehabed house.
Tom
Subject - To Pros? How to do? - Posted by Bob K
Posted by Bob K on August 17, 2003 at 21:58:49:
Hey All-
I do primarily rehabs. I have a LOC for deals with a local bank, however, I have 3 other rehabs currently, and another opportunity has just presented itself but its a larger purchase value (around $150k purchase price + rehab costs of about $10k)
Im worried about monthly debt service if I take on the $150k property, but I am wondering if perhaps SUB TO may work in this situation (have never done a sub-to). Here are the specifics:
FMV (after repairs) $190k based on comps - very conservative - at $190k, it would most likely sell very quickly.
$147k payoff on first (about $7k in arrears)
$10k on 2nd (I’ve talked to note holder, I may be able to get him to take $4k.)
Needs roughly $10k in cosmetics - carpet, paint, concrete drive repair.
So, $147k + $4k + $10k + $2k closing costs = $163k on the LOC.
—OR—
Would SUB TO work in this scenario:
So, I’m into the house for roughly $23.5k, sell quick for $185k
185k - 140k on first = $45k
$45k - $23.5k = $21.5k
Is this viable for SUB-TO? Any other ideas?
Thank you
Re: Subject - To Pros? How to do? - Posted by Marc NJ
Posted by Marc NJ on August 18, 2003 at 22:30:41:
Why not use his mortgae if you can. If your willing to do the rehab using your own LOC, then do the deal with his loan in place, just bring it curent.
I just completed a rehab in a similar situation. The house is being marketed now for 60K more than I have into it.
Good luck and proceed with the deal just use his loan, you’ll just save some of the cost.
Marc NJ
Re: Subject - To Pros? How to do? - Posted by Ronald * Starr(in No CA)
Posted by Ronald * Starr(in No CA) on August 17, 2003 at 23:04:39:
Bob-----------
I think that doing deals subject to is ideal for rehab deals, if you are sure you can fix and sell within about four to six months. The reason is that the lender, even if it calls the loan due because of the due on sale clause, still have to do a foreclosure to shake the owner–you–out of the property. Unless you live in TX or MO, it usually takes several months for that to happen.
Now another way to go would be to just “pass” on this one. You already have two projects going. I suggest that you may want to carefully comtemplate how many projects you have going at the same time. I certainly know the tempation to do mroe deals. However, it is also good, I feel to recognize that one has limits and can take on too great a burden at any one time.
I don’t see why you should take a $10K discount. If you are sure it will sell readily at $195K, why not sell for that?
Good Investing********Ron Starr*************
Re: Subject - To Pros? How to do? - Posted by Stewart - MO
Posted by Stewart - MO on August 18, 2003 at 08:31:27:
MO foreclosure goes pretty quick then as far as you know?
Re: Subject - To Pros? How to do? - Posted by Ronald * Starr(in No CA)
Posted by Ronald * Starr(in No CA) on August 18, 2003 at 09:25:32:
Stewart–(MO)-----------
I understand that the foreclosure can be done in as little at 20 days.
Good InvestingRon Starr********