Ok, I just posted on this forum yesterday, but I have already been hit smack in the forehead with a possible deal :o and Im SO unsure about what to do next, but Im pretty sure I can help them out here.
My hubby’s coworker’s house is scheduled for foreclosure at the end of this month. They owe 335K on the house, but the original mortgage is for 265K. Supposedly similar models in the neighborhood are selling for 319K (i have to check on that though).
Now, Ive read these boards and boards that are similar and ive seen some people say in similar situations to whosale it to an investor with a double closing with an attorney (which i dont have yet, but i do know an investor friendly title company), to do a short sale (even though they said that may not be good for a newbie to do), or to wholesale it to an investor and keep the coworkers there to rent from the investor.
I personally would like to flip this to an investor to buy and I need to find the simplest solution to do this as they have a very short time left.
I’m not sure how to go about this and I most certainly dont want to mess it up if this can be done in any proper fashion.
I do know that I still need to take a tour of their house to evaluate repair costs and then do a true assessment of the value of their house in their area.
Well…if your numbers are accurate you’re best bet I would say is a short sale. But a short sale is going to take every bit of 60 days from day 1.
Your going to need to get a figure on repairs and similar comps on the property. If the guy is upside down on his mortgage like you assume he is then you’re going to have to move fast if his place goes up for auction at the end of the month.
Get him to sign a letter of authorization stating he’s giving you permission to contact his lender to discuss his situation and fax it over to the lender and 48 hours later you should be in their system and you can contact them to determine if they’re open to negotiating a short sale or not.
If he isn’t late at least 3 months on his payments they won’t even give you the time of day so if he’s currently in pre-foreclosure then you have some time to put together a nice case to present to the lender on why they should unload the house to you at a discount.
If he’s in preforclosure you have some options. If he’s close to auction at the end of the month your going to have to blaze to get the auction delayed while you negotiate with the bank on a possible short sale.
How is it that they owe 335 on the house when the original mtg is 265? Do they have a second? A Home Equity Line? Is it other debt not actually tied to the house? They’re not telling you everything.
Yep, she opened a second mortgage on her house from what I understand. They seem really blahzay about their house going into foreclosure, but that’s neither here nor there, i suppose.
Also, it doesn’t appear that they have much, if any, equity in the house, the house is only about a year old, if that.
Oh wow, so I have to get permission from them and the bank to even put the house under contract. That shouldn’t be hard since they are so laid back about it and they are at LEAST 3 months behind in mortgage payments.
As for the short sale, since this is my first deal ever, I have NO cash flow and from what I’ve read, it takes a small amount of cash to get a short sale going. Is there another I could help them without having to do a short sale?
Also, I wish I had 60 days, but that’s not the case here, their house will go into foreclosure at the end of this month. Is this a no go?