This lady called and she is going to foreclose 3 May.
She behind $4000
owes $92
FMV= $125K
monthly= $811
She just wants out
Only repairs needed are paint and carpet. according to her. haven’t done due dilligence yet.
She said she is listed with an agent.
Is this a drawback? Do I have to wait for an agents release before I can offer her sub2?
thanks in advance
I have found that most realtors understand when it comes to foreclosures. If they go to the realtor and say “hey, I have some one who will rent my home and leave me enough down to bring me current so I do not have to foreclose.” Most realtors will understand and cancell the contract. I had one realtor charge them a $100.00 but that was no big deal. I hope this helps!
You could also offer to pay his/her commission at the closing table assuming the purchase price is the balance of the loans due.
Once you have title to the property, what do plan on doing with it? Selling it? Renting it? L/O?
Don’t forget that you can always sell it quickly by offering owner financing and then selling the owner financed note at the closing table. This way you do not need to worry about renting it out, the loan being called, or holding a L/O - if you need the cash now that is. When you sell the property, you assign the new owner financed mortgage at the closing table as well to a note buyer/investor. The payout on the note is discounted, but not much more than you would pay a Realtor if it is structured properly. The cash from the investor is wired to the closing agent where the underlying loans are paid off and then the balance is yours. Best wishes.
Warmly,
Michele Robbins, CPA
Thank you guys for the responses. I used real quest to price her house and I came back with a price of $96K, not $120 like she said. So this deal is too skinny.
What do you tell a person if you are unable to do the deal? Just tell them the numbers aren’t wrong.
Well, can you rent it out for more than her current monthly payment?
If you can, you could always buy it subject2 her current mortgage and then rent it or L/O to a new tenant/buyer. You could make a little monthly spread without any risk to you. If you need to pay the Realtor (although I would try to get out of that since there is little equity here) you could collect the L/O deposit for that cost. Just a thought for you.
Otherwise you tell the seller that your original interest was based upon the value being at $120k as you were originally told. She will understand that you do this for a profit (not for free) so if there is no way to make money, the deal does not make sense for you, unfortunately for her.
Good luck!
Michele Robbins, CPA
Michele,
Thank you for your help. I have just started my marketing campaign and this is so much fun. There’s a lot work involved. But, I don’t mind. I’ve received two calls thus far. Those two calls made me realize that I still don’t have a grasp fully on what is a good deal. My goal is to make at least $20k off any deal I get ivolved in.
My ad was in the paper for three weeks before I received calls. I’ve paid for two more months. This weekend I started my direct mailings towards preforeclosed homes. 100 in all. I am working within my budget. So, next week I re-mail to the pre-foreclosures one more time. Here in GA, you have until the second Tuesday of the next month after the announcement in the county legals.
My goal is to pay off student loans and clear my wife’s credit card balances and have a successful real estate business. I am in this for the long run. My main strategy starting out will be to use subject2 initially to minimize risk. Tonite, I will be at GAREIA to do some more networking. It’s great to be around like minded people. Unfortunately, my business cards that I ordered last Wed. are not here yet.
Thank you again for taking out time to help.
Rob