upsidedown l/o problem, any ideas? - Posted by RR

Real Estate Investing
#1

Posted by Nathan(oh) on February 27, 2002 at 09:29:03:

Rodrigo,

I am coming off of deals like this as well and making them work has been a chore. IF you get it on a sub2, you can sell it via owner finance at a high interest rate, but lately it seems that I only can sell houses when the price is right and not inflated. Therefore, you might try taking back a second as well to get the payment higher, makes it sound more logical to buyer.

Another option from the get go is to see if the seller would take a discounted rent or pay part of the 2nd mortgage. I do that a lot and it gets the payment where I need to be.

HTH

Nathan

#2

upsidedown l/o problem, any ideas? - Posted by RR

Posted by RR on February 26, 2002 at 20:26:43:

I 've a got a call from a seller :

Here is the situation

house is worth 155k
she’s willing to walk away.she wants to save her credit
first mortgage 80k , pmts of $1040.22
second mortgage 70k , 1062,84
Is it a lease option an option here?
I can get like 1500, 1600 a month from the tbuyer?

how I WOULD COVER THE OTHER $500,00 ?
thanks all

#3

This is difficult but not impossible… - Posted by David Krulac

Posted by David Krulac on February 27, 2002 at 20:57:15:

though there are easier deals out there and you may want to pass.

There is no equity! the high interest rates don’t help at all either. if these were 6% mortgages you could work the interest rate spread.

Buyers are price conscience more than terms, but the monthly payment figure is critical also.

One possible solution is to write a contract for a short sale. The first lender is covered, but the second lender is vulnerable and may take a discount.
Write a contract for say $120,000 to cover the first and $40,000 of the second, get the seller to sign, this WON’T help her credit and see if the second will discount $30,000, then you have a deal that you can work in any number of ways.

David Krulac

#4

Re: upsidedown l/o problem, any ideas? - Posted by Craig (IL)

Posted by Craig (IL) on February 27, 2002 at 10:22:05:

I’d like to find a way on these things to. I find that often people in trouble have high interest loans with high payments to begin with (part of the reason they’re in trouble) to make a rental or even a l/o cash flow.

The only thing that I’ve been able to do, when there is good equity to be had, is a tradtional purchase. But that, of course, costs a lot of money that the investor won’t get all back right away. I haven’t yet gone them route of speaking with the lender and offering to formally assume the loan but at much better terms (trading risk for terms).

I’d like to here from others on this issue.