Guy called me last week telling me that he wants to sell his porperty. He is 3 months behind. The lender said he needs 5k to bring the loan current. He told me that he just cant afford it any more since property taxes went up. So i am thinking of a short sale. here are the numbers
*Comps 95k-100k
*1st morthage 62k
behind 6k-8k
*2nd mortgage 15k
current
*Repairs 6k -8k
Do you think this property can be short saled? If so Should I try and short sale the second then the first? If not SS on the first, is it possile on the second? Also on the purchase price what should I put? Someone told me to just put “loan pay off” on the purchase price line. Please help out on this one.
You will have more response from the second lien holder. The 1st probably will not deal at all. It costs nothing to find out but a little time and work on your part.
I would second guess the loan companies and figure how much they may take and use that number in the sales contract. As an example figure $70K for the first including the arrears and $2500 for the second lien holder and make the offer at $72,500. That way you do not have to buy the house if you can not get the lender to bargain with you. If you just put pay off the loan you are committing to pay $85K plus for the house.
Good Afternoon Ground-Up,
It depends on what area the home is in and the lender. Remember, there are lots of homes and only one you. In my area (Indiana / Ohio / Kentucky / Tennessee) I would have the homeowner write a letter stating he cannot and will not be making any more payments. In addition I would take pictures of the property, showing the lender it is not in the best of shape. I would send this next-day-air to the lenders (1st & 2nd) with a letter of credit so they don’t think you just messing around and an offer.
On the 1st I would offer $40,300 (65%) and on the 2nd I would offer $1500.00 (10%). If the home goes into foreclosure the 2nd position is out completely, so they will sometimes take just 10% instead of nothing. Now let me repeat, this is for the area’s I am used to dealing in, in some parts of the country, you would offer as much as 90% on the 1st and 50% on the 2nd.
In the end, what really matters is what you have to get the property for to make a profit, even if that means paying close to 100% on each loan. Something else to think about is making up the back payments and completing the deal as a subject-to, this way the loan stays in the sellers name and you simply start making the payments. Whichever way you end up going, the only thing that matters is whether the property is profitble of not.