Need advice- 2nd mortgage holder foreclosing

Foreclosures, Short Sales, Tax Foreclosures
1

This wil be my first deal and I need advice. Haven’t heard of this before.

Homeowner is current on 1st mortgage of $200K. 2nd mortgage is $50K and mortgage holder is foreclosing. HO is leaning toward unloading the home just to get out from under and move on. I live in the neighborhood where the HO lives so I am very familiar with market conditions. ARV is $290-300K. Home is 4 years old.

What would you do in this case? I thought I’d pay off the 2nd, plus any legal fees and back payments, give the HO $10K of his equity, negotiate with the 1st mortgage holder NOT to invoke the due on sale clause, take over payments, and flip it. Homes reasonably priced in this neighborhood are selling in anywhere from 2 weeks to 3 months.

Any advice would be appreciated. Thanks.

2

The most obvious thing i see here is that when it’s all said and done you will be into this property for over 90% of its value. For the amount of work it will take you to get the deal put together seems hardly worth it.

I bet you can find these numbers by simply looking for deals through a realtor and just driving around and calling on For Sale signs.

This does not look like a deal you should spend a ton of time on.

3

don’t do it.