Short Sale?? What would you do???

Foreclosures, Short Sales, Tax Foreclosures
1

Hello-

OK, here is the scenerio:

I found a lady that is ready to sell her second home (rent house $880/month). She has rented it to people that she knows and has had a terrible experience with it. She is asking 87K (very nego) for it and owes 69K on her loan. I looked up the value through the county and it is valued at 81K. She is VERY eager to sell and wants to sit down and talk about doing something soon. She said that the bank has been threatening to foreclose, but she always pay up what she owes before they go to the next stage. The house is in a nice area right off the freeway and I think that it would be VERY easy to rent.

Here are my questions:

  1. Can I try a short sale even though she has only had THREATS of being foreclosed on?

  2. Does anyone know a creative way to make her happy (atleast walk away with 10K) without overspending for the property?

  3. Would you walk away from this deal???

Thanks
:-\New Invester that doen’t want to mess up…

2

  1. no, a short sale isn’t possible at this time.

  2. You might try to L/O the house from her…then do a rent to own with it. Your L/O from her would cover her PITI and give you some cash flow from your rent to own tennents. The benefit to her would be guaranteed payments, no upkeep, no tennet problems and a nice payoff when you (actually your tennet) exercises the option to buy. Natually your tennets option to buy is higher than your option to buy from her. A nice payoff for you with little cash outlay.

  3. I wouldn’t walk away. There’s a deal there somewhere.

3

knb,

Be aware that the value that the county sets is for tax purposes and may or may not have any basis in reality. The last property of mine that I checked appraised (November '05) for $77K and the parish has it at $49K…

Have you asked here if she’s amenable to a Sub2 deal? If you give her some cash and assumed the payment on a sub2, would she be happy?

If you could pick it up for $10K plus the $69K note, it could be a win/win…

Keith

4

Sounds pretty reasonable Keith. I’d subtract any mortgage payments she’s down from the $10k though. Make sure the lender hasn’t sent a NOD. They have to pull the trigger on the due on demand clause to foreclose. This not good for sub2.

-H