I can’t seem to find an answer for this. I have a viable sub2 deal on the table with the following facts:
int rate 11.59%
PI pymt $1061
potential rent $1250
The problem is the seller owes 4 years of property taxes ($15,000) which are included in his Ch. 13 bankruptcy pymnts. Short sale may be an option. I am trying to renegotiate the terms with the lender but the taxes could still kill the deal if they fall back on the house or keep me from reselling. Any advice?
u’ll need to contact the BK trustee for approval on this. see if the same deal transfers to u if u take it out of BK. if not, u’ll have to cure the taxes and then u r in it deep. personally, i think it would be too much to pay up front becuz u need to get at least twice the upfront cash back from A) ur end buyer on ur sell side. or B) ur tenant, and renting it would be too long to wait for ur cash becuz a tenant is only going to give u a deposit.
also, that is a really high interest rate for a sub to deal. what is the appraised value? if it’s not at least $140k, i’d back off. i think it’s hard to sell a $1250/mo pmt unless the property is higher in value. what part of TX are u in?
I am north of Dallas. The house should sell for around $130,000. The rent isn’t outrageous for the area but it is pushing it. The problem is that at that interest rate it won’t cash flow so I would be looking for the upfront cash to compensate. The house is not in bankruptcy protection because they missed payments on it. The taxes are still part of the payments they are making. As much as I would like this to work, I am thinking that a short sale might be the better alternative. That way, I could clear up the tax issue as part of the deal and still come out ahead. Shame on the bank. Can’t believe they’d charge that rate on a high risk buyer but not require escrows.
well with $130k that is not that bad for the pmnt. even if u could pay the back taxes, can u get $15k-20k for a dp? most likely not on that priced house, u r right. i’d say u r also correct to try to SS it. the bank has to be desperate fot that though. see what happens though