Seller Second?
We are currently trying to work out some nitches in this deal. I am the buyer of the property that is selling for $1.399mil but is valued at $2.1mil.
The Hardmoney lender wants me to have the seller carry an imaginery second that we throw away for $700K. That means instead of writing the contract up for 1.399 it will be 2.1mil. Where does the money go; will the seller get the 700k at closing or will we get the 700k or will the equity still be in the property?
Disappearing Seconds (as we call them here in MI) are common... although illegal. The word on the street is that Feds are in town cracking down on them. They can be considered bank fraud.
I agree with the others. Bank Fraud has been a BIG hot potatoe on the residential side for many years now. And the Feds are cracking down Big Time on it as well. The same is true on the Commercial side. Fraud never makes a deal worth it.
[addsig]
You could have a trusted third party make an agreement with the sellers to buy the note after closing.
CommercialKing, how does the straw man work?
A straw man is usually not a person at all but an entity who buys at the lower price and sells to you at the higher price and carries back the note. Generally it is either 100% owned by you or some trusted relative.
I have been known to be the straw man, then trade my note (post closing) for a position in the property.
Thanks and I just did. More developments on the deal since it post this question.
Hello Nate..I have worked a short sale inthis kind situation....1.worked with the first to see if they would discount (short sale) the note ...show them all kinds of reason, repairs, condition etc...to support your discount.......be VERY patient and then talk to second and tell them that you want to get them paid off....but would they work with you on the numbers....rather than them getting nothing , if it was to foreclose....they normally are quite receptive ....I was able to take a $16,000 2nd down to $3,000 total pay off ,,,,be sure to get a paid in ful letter to back this up ....I hope this lightens your path ...good luck
is it under contract, do you have control?
[ Edited by commercialking on Date 09/17/2006 ]
yes it is very admirable
This is hilarious!
Thank You so much Ericsrei.
I really appreciate the feedback.
Very helpful.
Thanks!