We’re new to real estate investing in the Austin area and we’ve come across a pre-foreclosure deal that we’re looking for details. ARV is 126K, the owners are behind by $4500 on their mortgage and approximately $3400 on taxes. They have mortgage payments of $746 and they are willing to walk away from their equity if someone will catch up on their mortgage and taxes.
This seems like a good deal, and something that could be flipped relatively quick, but I’m not clear on all the detail on a sub2 deal. Do we to need to do a land trust or have one prepared? If so, what kind of expenses would be associated with it? Or are there other better options? The pay off is approximately $88K on the note. Any suggestions would be greatly appreciated.
Trying to bring you up to date on the proper proceedures to do a subject to deal in a post, would be like trying to walk you through re-building a Chrysler Hemi engine if all you have ever done is purchase gas.
My advice would be to see if another investor in your area is interested in taking the deal whereby you get a lead $fee$ for the deal. Sometimes you may find an investor willing to walk you through what needs to be done, but then again make sure the investor wasn’t in your position a few weeks ago.
If your intent is to buy and resell for cash or a new loan then all you need is a deed from the seller and a letter giving you authority to talk with the mortgage company. Buy it in your name or better in a corp or LLC. The land trust is basically just used to hide the true owner ID from prying eyes and offers no asset protection. If you plan to keep you would need to set up a blind from the mortgage company with trust etc.
Good luck and thank you,
Ted P. Stokely Jr
11505 Sw Oaks
Austin, Texas 78737
512-301-9171 home
512-587-6177 mobile
I would agree with John on looking for another investor, I may not give them the deal if I really wanted it, but I would offer to pay them nicely to help walk me through the paperwork. The good thing about trusts and such, you can use them over and over once you have them, just changing the specifics (names,addys ect)
Im sure there are investors near you that would be more than happy to help you. Just make sure you make it worth their while, so that if you need help again they remember you in a good light.
Thank you maybe we should ask where csellars is located, we may know someone who can get him started in his creative real estate investing career and help him with this deal.
How about it cesellars, where do you’all hail from.
My Texan must be approved upon, any hints Heather?
John $Cash$ Locke
PS: I think it is important to show your location in post’s this way a member may get a state specific answer. Now that I think about it I am currently in Tampa, Florida I will change this and show my location in my posts.
Upon saying that I might do the deal and just pay an investor to help walk me through it, I will also add I DID partner my first deal… which was a sub2 =)
John, come on down here to Texas … I’ll refresh you on the importance of the word Ya’ll … and how everyone here at least knows where over yonder is ! heh