Non Qualifing Assumable in Default

Hi everyone,
I have a house under contract for 37,500. I have not been able to wholesale it. I just found out that the property is in pre-forclosure and the mortgage is a non qualifying assumable. the balance is 14,000. Should I do a subject to with seller and create a second note with them for some of there equity? should I assume it and create a second note ? Should I just try to negotiate a lower price and hope to wholesale it? My exit strategy is to 1. wholesale make 5k or more 2. sell owner finance at higher price get downpayment money 5k or more take the spread for a couple of yrs then they cash me out pay off the notes and keep the spread . Advice is needed and welcomed


How much is the owner in arrears? If you assume or take subject to, you are also taking over the arrearage.

How about property taxes? Is the owner in default there too?

The owner may not have as much equity as you think.