Urgent!! Need Advice on 1st Sub2 Deal!!

I’ll try to make this breif, hopefully i won’t leave out any important details. My girlfriend has found a motivated seller who wants out. Here’s the deal.

1st Home: 210,000 Loan Balance/ 240,000 FMV
2nd Home: 20,000 in arears/ 40,000 FMV (Forcloses on Sep23)

The way she’s trying to structure this is as follows;
Take over payments on 1st house via sub2. L/O it for future value of 280,000 with an option payment of 30,000. Take the option payment and apply to the 2nd house along with a hard money loan for the rest of it’s balance. Then lease 2nd house through section 8 program and get free and clear $650/month. The original agreement was if my girlfriend could get the seller up out of the 2nd home, she would release the first home. My girlfriend agreed and said she would “try her best”. And with that she is going over today to sign the two seprate contracts for purchase. She says worse case senario is that she signs contract for 1st house and can’t get short sale and loan for 2nd house in time for forclosure and it will be the seller’s problem. Then she would have instant equity and a 30,000 option considertaion money.

Are there any better ways to structure this deal that will be both win-win and profitable?

What is the worse case senario in this?

Thanks alot.

Finding someone with $30,000 that wants the $240,000 will not be easy. Everyone looking to buy is looking for bargains with little cash as possible especially in lease to own deals. The first house is thin on equity if you can not sale or lease it will not take long before you loose it too. You will have little cash in it but you do not want to screw over your seller.

What is the loan balance on the second house ? If you have enough equity you could just get a hard money loan on that house and pay off the loan and even offer less than is owed (short sale). You have to really hustle and stay on top of the mortgage company to get a short sale done in time. You can postpone the sale either by showing bank there is a buyer or file for a TRO in Distric Court. I have not done that before. You may be able to file a motion yourself and get the judge to grant it the same day. You will have to visit the courthouse to find out the answer. You can also hire a good atty. Hope my suggestions help a bit.

Thank you,

Ted P. Stokely Jr
11505 Sw Oaks
Austin, Texas 78737

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