I am currently looking at a property that is in pre-foreclosure.Here is a little info on the property.Also I want this property for our primary home.
Property is distressed needing 35,000 in upgrades
With upgrades should push Value to 325,000+
Delinquent Amount: 5660
Loan Amount: 112000
Assessed Value: 228464
Comps in area range from 399,000-799,000
What will the process be to do (if I can) a subject2…
Thanx for any help,and I am sure other questions will follow.
RUN DON’T WALK to the nearest bookstore, and pick up a copy of Making Big Money Investing In Foreclosures (Without Cash or Credit) by Peter Conti and David Finckel. It will answer all your questions, and then some, in easy to understand, clear, concise language. This could be a great deal for you, and this book walks you through the step by step process.
Thanx Hallehomes, really appreciate the info…going this eveing, and get this I am going to drive…thanx again!
Did you get the home? Like to know how it went.
No offense hallehomes but your answer was no help at all. Besides Conti-Finkel books are expensive.
Anyway… what you can do is tie up the home for $120K. Get a hardmoney lender for 65 ARV which would be $180,000 (if appraised at 300K). The balance after paying seller is $60,000 which is escrowed & used for repair costs. You will only need 35K though of this amount for repairs.
Once repaired, you can sell for full appraised value with a land contract after getting 10% downpayment. You then sell the note for a discount of 15% (worst case scenario) this would leave you with $230K from which hardmoney loan is paid off along with closing costs, finance fees ect. You should be left with over $60K or so. Not bad at all.
What you do depends on the cash you have. If you have the repair money and the money to bring the loan current and cash to give the seller then you can do it sub2 and you will have to get this cash from another source besides borrowing against the house you want to buy. If you only have the cash to bring the loan current and give the seller some cash and note and do not have enough time to get the rehab cash then you can do the deal sub2.
All you need for sub2 is the deed from the seller and the sellers permission to leave the loan in place and let you make the payments. You still want to do a title search to make sure their are no other liens, taxes etc against the property.
There are several complicated ways to hide the sale from the bank including setting up a trust. I have also gotten the sellers to send a letter to the bank hiring me as their property manager and to deal with me directly.
It sounds like a great deal for you. Your comps are too far askew. You need to find houses inthe area the same size and condition to get a closer range for the real value.
He could do what I do, go to the bookstore and grab the book…head over to the coffee area and grab a seat.
Make sure to bring a pen and pad.
Dont forget to put the book back on the shelf when you finish.
What a great investment! All for the cost of a cup of coffee.
One more option-copy the ISSN from the book, then get it from your local library. Ask them to order it or do an interlibrary loan if they don’t have it.
The biggest problem here though, is one of time. You may lose the home before you finally get the book and implement what needs to be done.
Seriously now, are you really telling us you cannot afford a $30 book but can afford a…a how many thousand dollar home?