So here I am In Nor Cal) sitting in a nice families front room and the wife is really working me to take over the payments of her 2000 sq foot house. The total payment is $2300.00 a month on two seperate(adjustable rate) loans one at $240,000, and second at $63,000. Taxes are not impounded and they are going to be about $3000.00 to bring current. Oh by the way it will take $14,000 to bring the loan current. The total owed is $303,000 (seller apraises the house at $343,000) but local sales would probably warrant $285,000 retail.
Okay, Okay, I know but I would love to here from all of my wise and experienced peers. on what you would think.
The motivation is there, but it seems that a short sale on the second may be the only way to make this even pencil… but there is that adjustable on the first. Any way I thank you in advance for opinions. ;D
I would short the first and second for a decent profit. Make sure you get good comps.
If I short the 1st, wont the sale then have to be cash? How do you do a subject 2 but short sale the loan? Thanks for your help.
If you short anything, the lender will expect you to cash them out soon. So what? That is customary. When you get the SS approved, tell the lender(s) you need 30 (or 45) days to close, whatever you need or whatever you can get from the lender. In that time, go find an end buyer. Either simul close or assign your contract for your profit.
Not sure why you would want to mix a Sub2 with a short.
Hope that helps.
Great help. Thank you. 
Glad to help. Anytime.
You could try to short the second for less than 2K and if the interest rate on the first works for your goals pick it up sub-2. IOW The interest rate on the first might still be good enough for you to want to keep it for awhile.
Given your numbers, 240k-1st and 63k-2nd, 14k arrears and 3k taxes. I am going to guess that the arrears breakdown to 11k-1st, 3k-2nd. IF you can short the 2nd to 2k then you would owe the 1st 240k+11k+3k= 254k. You might be able to pick it up for 256K.
If the home needs little to no work and this number works for you with the interest rate, go for it. You say retail is 285k so you potentially have 29k equity. Mind you you will have to subtract holding cost, realtor fees(if app), repairs, etc.
You will still have to come up with over 16k(11k+3k+2k) cash out of pocket just to get the house. You should be able to get the arrears down to 5k-6k upfront. So that should lower your upfront out of cost to around 10k.
you could always short the 2nd pay it off and bring the first current.
Then do what you want with it.
TG