Have a situation where I can get a home on contract, the lady that owns the home has a tenant who was on section 8 but now was kicked off section 8. The tenant isn’t paying the rent and the home owner wants her out but the tenant will not leave. The owner wants only what she owes on the home which is 60K on the morgage, buts comps in that area last sold were around 30K-35K. Since the homeowner is desperate to sell how can I make this work.
Hi,
The tenant makes little difference in this deal as the property is way upside down!
There is potential for a short sale except generally speaking lenders have not even considered short sales until payments are three months behind and it has been difficult to convince lenders to even agree to a short sale on a property that is someone’s investment property!
You would have to buy this property for around $20k in order to make sense (70% of FMV) and of course if it needs repairs less than that, but I would think it is a tough proposition since it’s not owner occupied by this lady!
If she’s not in the rears and you can rent it for more than expenses and make a positive cash flow you could take it over as is on a subject to or a wrap however owning and being responsible for a home way upside down is not advantageous and if market values don’t come back you risk never being able to sell it for what’s owed and if you ever had to walk away risk being sued for putting the original owners credit at risk!
I think I would walk away from it even though it could be a easy deal to take control of, it’s not a deal in the long run!
GR
Or you could refer it to a realtor who does short sales in exchange for a fee.
These are my favorite situations. Dont short sale, it ruins credit. Save her credit and put cash in your pocket with a sandwich lease.
If payments are behind her credit is already shot. How exactly do you plan to “save” her credit AND put cash in your pocket with a sandwich lease on an upside down house, possibly with payments in arrears? How much could you possibly hope to get as a down payment on a $30k house that you need to price at more than $60k?
By the way, we don’t even know that the payments are behind. All we know is the house is upside down. Now, with that in mind, please tell us how you plan to eventually sell a $30-35k home to the tenant-buyer for $60k+?
To the author, please disregard the post above! Do what I suggested or as Gold River said just walk away.
NSU…wassup…been a minute…Cato leave this house alone there is no deal worth your time. If you want to be a wholesaler you need to start thinking like one. Your time is very valuable, you cant help everyone. You want to spend no more than 2wks on a wholesale deal, contact with seller, gauge interest, look at property, make offer, assign, close, move on.