What is the best option to complete this deal? - Posted by Gary (CA)
Posted by Gary (CA) on February 22, 2001 at 10:44:06:
Here’s the real deal:
Seller deeded me condo in land trust for $500. After repair value between $115-120k. However the liens are:
$104k 1st TD
$3k 1st TD arrearage
$3k HOA dues (in arrears)
Other costs will be:
$3k in closing, title ins., misc. fees. (in sale to new buyer)
$2k holding costs
Total: $118k ==> Little or no profit
HOA arrearage was a surprise (learned it from preliminary search) since seller told me it was only $500 in arrears. Gave seller $500 to walk before I did prelim check. I figured $500 was low risk to get them to sign before I did my due diligence.
Will a HOA discount or waive arrearage if I would buy and pay right away? Their motivation is that the 1st TD will foreclose and wipe out past due amount. Have HOAs been known to do this?
Since it has been deeded to me, can I cut my losses and rent to someone on a month to month with renter’s understanding that it will be sold in three months? That is, just collect rent for a few months and let 1st TD foreclose with sale in 4 months. I don’t feel as bad about curing seller’s foreclosure since seller has already been verbally dishonest about HOA arrearage and did not live up to some of the terms of our purchase contract.
What are my options?
a. Sell as fixer and see what happens?
b. Attempt to discount HOA to allow profit room?
c. Do nothing & count my blessings that it’s only $500?
d. Rent it out and run with the money?
e. Fix it, discount it and L/O for $120k?
f. Fix it, discount it and sell No Qualifier for $120k?
g. Anything I miss?
Thanks for your input.