Sub 2 deal?

Hey all,

I have not done a short sale or a sub 2 deal nor do I pretend to know what to do. Here is what I know.

This lady filed Chapter 7 on Feb 06. Its a side by side duplex. The condition of this property I do not know. I figure at least 10K a unit for repairs. She lives on one side and told me it was updated with plumbing, electrical, etc.

First lien is a 30 yr fixed at 9% interest with 102K remaining
Second lien is a 10yr fixed at 25% (no typo) with 27K remaining
The trustee gets 273.00 a week on top of the above payments
Comps are 125-130K range. She got an appraisal at 141K. My guess was that the bank didn’t want to take it back so they “made” the appraisal come in to where it needed to. She has a letter from the second lien holder saying they would take 10K right now. Suprise suprise.

Just looking at the numbers it doesn’t make sense to pursue. BUT…how do I know what the banks will take unless I try? I don’t have any of the authorization paperwork or quite frankly know where to begin. Maybe I could get the second lien holder to take a low ball offer and assume the first lien. This lady absolutely wants out and has already signed my authorization form and also told me that she would deed me the house. Any suggestions or help is welcomed,



What do you think would happen if you offered $122K asking for $10k in repair allowances (painting, flooring, ect) with the original mortgage ($102) getting paid off in full and the $10k to the second lean holder (as payment in full for $27k)? You might be close to getting this for no money down? What do more experienced investors think is it possible?


I think 10K to the second lien holder is way to much. I would give them 2K at the most. They are gonna be wiped out by the first if it goes that far. Also I’ve heard about short saling the first then foreclosing on the second thus giving you even more leverage and equity. This is a tight deal so both lien holders would have to come down considerably.