Selling My House
I'm trying to get started in real estate investing - in particular rehabs. However, before I do I have some problems that I need to solve to free up some resources.
First, I own a house with 2 mortgages. We filed bankruptcy last year and need to get rid of our house which is a big financial burden.
Our 2nd mortgage is listed on our credit report as discharged in bankruptcy. Our 1st mortgage doesn't say discharged but our credit isn't being updated by the mortgage company.
The house should sell between 230000 and 240000 and combined mortgages are around 221000. If we use a real-estate agent we won't get any cash out at all.
We were sent a letter sometime back from loss mitigation dept. of 1st mortgage holder offering ways to help. One was a short sale. Would that be a good idea?
Is some sort of owner financing an option here where I could get some cash down and monthly payments to cover my current mortgages?
Your advice would be greatly appreciated. My goal is to sell our house and have some cash to buy a house and to free up money for investing.
I don't have much in the way of answers, but a question whose answer might be very important to you is whether by virtue of not reaffirming the debt but continuing to make the mortgage payments (which is what I believe you did) you have vitiated the "due on sale" clause ... if so, it might make it less risky for you to give someone owner financing. You might ask that question over in the "subject-to" forum where the investors deal with "due-on-sale" clauses every day.
Ordinarily, if you sold the house with owner financing the bank could call the loan and make the new owner finance it in their own name ... or face foreclosure. Perhaps bankruptcy of the owner destroys the bank's power to do that.