Looking for suggestions on my sub-2 deal

General Real Estate Investing
1

Hey all,

Doing some due dilligence on a property and got the mortgage docs to look at and it looks like the second lien has a balloon due on the 12-01-06. How would you handle this? Here are the numbers.

First Mtg-----74.1K @ 6.2% interest/ 30 yr fixed, no balloons
Second MTG----14.2K @ 6.5K interest/ Balloons on 12-01-06
No repairs needed/ move in condition
Appraised in Aug. for 132K
I think it was a “re-fi” appraisal and this market dictates that its in the 115K-120K range max. Desireable location and good area.

I"m looking to sub-2 this home. Those numbers include back payments as they are the payoff numbers I got from the lender. Owner is 5 months behind. I could use one of my credit lines to pay off the second lien IF I really needed to. Not sure this is a great deal to drop 14K down. Lawyer fees should be known today. My guess is about 3K.

Nate-WI

Nate-WI

2

first of all, what is your exit strategy on this one?

second, what is the monthly pmnt(s)?

personally, i’d most likely pass on this. yes, the APR is favorable but you’d be in $14k up front. are u going to L/O, CFD this houae? rent it? sell it outright?

3

My thinking is that I’m gonna just finance it with my local lender and then put it right back on the market with the intent to lease option, owner finance, or sell for retail. The area and neighboorhood is what makes this attractive. Plus its at 88K and its worth 115K for sure. I’ve decided that I’m gonna offer him what is owed and close in two weeks and give him 1K after closing for his equity. I can owner finance or lease option this thing for 1K a month with three to five percent down in this market.

Nate-WI