A friend has a home that is currently rented out for 1500 a mo. tenants are 1 mo. behind. Owner wants to get rid of house. He owes 284k on 1st & 49k on 2nd, has a tax lein for 4k. Monthly on 1st 1650 & 2nd is 450. The home is worth about 320k and could rent for around 1500 - 1600 a mo. Seller is willing to sign over deed with nothing in return. I’m not sure how to work this one. Sub2, Lease Option, Shortsale??? Need help.
First off what are your plans once you own it? As you can tell its not going to work as a rental, the PITI is $500 over the rent and that’s not even covering another $700 or so a month in other expenses. If you can shortsale it low enough and resell to someone else as a owner occupant than you might have something to work with. Beyond that not much else you can do. Of course the seller will sign over with no problem, he owes $17k more than its worth. That plus the closing costs means to sell he’ll have to pull $20k out of thin air to get rid of this one and signing to you saves him $20k.
I can see why the owner wants to sign the deed away. Don’t inherit this headache. I agree that if you can shortsale it then there might be potential. It sounds like he is current on payments though. I’ve never heard of a shortsale when the payments are current.
Initially I thought I would try to negotiate a short sale and purchase the property and rent it out for 1yr and sell it. Another option I was considering was to negotiate short sale and see if bank will allow me to list the property since I am a real estate agent. I just want to help my friend from going through foreclosure. I have never negotiated a short sale and since the owner is only 1 month behind and he just wants out to avoid ruining his credit. How is the best way to approach the bank?
Why would you want to rent it out for a year and lose money on it for a year?
There’s a lot of good info on here about how to do a short sale. It’s typically:
- Get house under contract
- Get owners permission in writing to speak to the bank
Is it possible to work a SS if the foreclosure process hasn’t been started yet?