I am new to these boards and have been investing about a year now. I currently own 3 single family homes that I have rented out in Northeast Ohio.
I have not done a short sale so I am an extreme newbie when it comes to the process.
Here is my situation:
My father just filed for bankruptcy due to owing the govt a lot of money.(side note…everyone pay your taxes :biggrin) His attorney timed it so that after his bankruptcy he would be able to live in his house for about a year before he has to finally get out.
Here is my question: when should I start the SS process and what percentage of ACV should I offer.
The home is worth approx 115 as is, he owes approx 95. The home is outdated and I believe I could put in approx 15K and comfortably sell the home for 140k.
I dont want to start the process too soon as I want him to be able to save some money while living rent free, but I dont want to wait too long and miss an opportunity.
any help would be greatly appreciated.
Check with your local attorney about BK laws in Ohio but in TX, it will be hard to do a short sale while in bankruptcy (7 or 13). The BK trustee holds everything under “lock and key”, and you have to submit everything thru them bypassing the lender. You’d probably be better off and save more time by looking for other RE deals until the BK gets released, in which case you can work thru the lender (e.g. collections, asset dept, LM, etc.) It seems since it is your father that you would have the deal tied up. Just wait until the BK is released or he gets a foreclosure date assigned and then submit your SS package.
I am assuming you are talking about waiting for the house to be discharged from the BK before you buy it.
I just have 2 comments. Run your idea by the attorney. This may not be a kosher “arms length” transaction.
Also, if the house is worth 115K FMV and your dad owes 95K, it isn’t a short sale candidate. Why would the lender discount to you if their loan is covered by value?
Thanks guy, I realized after I checked another site that since I am a family member I might not be able to do the deal anyways.
I will check with my attorney to be sure.