A lady calls on one of my ad’s and says she has a house that she will walk away from because she cant make the payments. she owes 3900 in back payments. she owes 122K on the house its in good shape, needs no work. her payment is 1300 a month piti. the comps on the house are in the 150k range. i told her i might be able to help her but the mortgage will stay in her name. she is ok with that since she will leave anyway if nothing happens. i was thinking of taking over the house and selling it on a l/o. any suggetsions or comments?
Personally I think its a tight deal. With 4K to cough up and at 1300 per month your profit could get eaten up quickly if you don’t find someone to fill it. What are market rents for that home and area? Are you sure there is no work needed? How is your market and specifically where that home is located? I just think there are better deals out there.
Nate-WI
thanks for ur reply nate. this house is in upstate ny and its in a small town. its a depressed market so i dont think this is a great deal also. i just wanted some input. thanks for your time nate
you can tell her you can purchase it s2 contingent on if the lender allows a forbearance. have her call the lender (in front of you) and ask for a forbearance, that is where the lender takes the back amount owed and puts it on the back end of the note. be sure that she signs a purchase contract with this stated in it, and add wording that once the forbearance is complete, the deal will follow thru and you take title. this will protect you so that she does not try to back out.
if she puts up a fuss about it after the fact, let her keep it and walk away. HOWEVER be careful becuz some lenders will want to up the pmt for this luxury but it does not have to go up. if they insist and upping the pmnt, and the #'s don’t work at all, you can still walk. this should be added to your purchase contract as well.
this will allow you to buy it S2 and keep your cash, just costs $10 to make it legal.
due to the fact its worth about 150k you can sell it through owner financing for at least 160k. If she agrees to the deal start running ads in the newspaper and make sure you put “no qualifying” in the ad. make sure that buyer will put down at least 15k which you will easily get. at closing your buyer will give you 15k from that you can make up the back payments and whatever else you have to pay for then you just give the buyer back a mortgage for 145k if you sell for 160k. don’t make up payments until you get a buyer and yes this is a great deal because there is no risk to you and you’ll net around 30k if all goes as planned.
Mike