I recently was contacted by a home owner who asked if I could help them. She owns a property that she has lived in for the past 4 years, she owes $269,000 with a $11,000 pre payment penalty so $280,000 her monthly payments are $2,500 per month.
The house was appraised 60 days ago by an appraiser for $325,000. I asked why the apraisal and it seems she recently re-financed. Her motivation is she is 1 month behind on her payments and just can’t afford to keep up with them. She said she will be bringing the amount current this month but needs to sell fast. I asked why she did not list with a realtor and she replied it would take to long and cost to much $$. I normally do wholesale deals but have been reading a bit on this forum about sub2. I asked if she would be open to allow me or my investors to step in and take over payments and walk away. She said she would be open to that, I explained that her name would still remain on the loan unless the investor decided to refinance himself and she was still ok with this.
My question would be how different is the contract with a sub2 compared to a wholesale deal? What needs to be in the contract and does anyone see a issue with me assigning this for a quick profit of $5,000 as my fee. From what I can see is if the investor steps in the loan at $269,000 he would have $56,000 in equity -$5,000 for my fee leaving $51,000. If he decides to pay cash at the $280,000 he would have $45,000 equity - $5000 fee leaving $40,000 profit.
The best case scenario is he sells or rents to reduce his holding cost, I do not have any desire to take over the payments and hold this myself. I want to make a few dollars and move on to the next deal. I do feel their is money to be made here, what do you all think?