Gotta Live One In NYC: But There's A Catch...
Contacted by a landlord who's in foreclosure.
3-family, 4br/3br/3br--bottom is vacant top two rented with lease til December 2004.
Top two units are rented to disabled citizens, through a program similar to Sec 8.
Landlord says 370k in arrears, and claims its worth 450K. Landlord wants 20K for the deed.
I have a feeling arrears are probably around 390K by now. Getting Loan Auth signed on Saturday to find status.
Claims no repairs need to be made (yeah right). I would like to vacate the premises, but paying of disabled persons to vacate the house seems like a hard thing, because it probably took them a while to find their residence in the first place.
Here's my question: if the 3-family is foreclosed upon by the big bad bank, will the bank have to keep the tenants until December when the lease expires? I'm thinking yes because it's certainly not the tenants fault that the landlord went into foreclosure. What will happen to the tenants?
Anyway to make this a win win? I want to flip it, but seems very difficult with the disabled tenants in the property. I do not want to be a landlord in NYC that's for sure. Suggestions please!
So what's your problem with the disabled tenants exactly?
Why's it going into foreclosure? Is it not making enough to pay for itself?
Well, word is that when you flip people often want it vacant, which makes sense so they can target their preffered tenant. I still have to look at the numbers and see why, but basically a tenant left and she did not refill the bottom unti, so she started missing payments, maybe pocketed the money from the other units. I am still getting that story out of her as I build rapport.
But now she just wants to be done with it. So we'll see what happens... :-o [ Edited by ddhamilt on Date 05/20/2004 ]
I believe the lease to the tenants is junior to the loan being foreclosed on.
That said, the lender will likely not disturb the tenants. They may let the lease expire of they may even renew it.
Are you really saying the owner is $390K behind? I would expect you mean the loan plus what they are behind equals the $390K.
He wants 20K. What will it take to bring it current? 20K plus the back payments is not very attractive for a subject-to. Even if the buyer expect to refinance that is still a bit of equity tied up as the lenders will look at the sale price rather then the value in most cases.
I do not think the problem is the tenants. I think it is the numbers. Make the numbers work with the tenants there. If they later move out the deal just gets better. If they stay the deal is still fine.
John
[addsig]
Why would the lender keep the tenants in the house past the lease? That wouldn't make sense...lenders aren't landlords.
If I sub2 it, I would have to convince someone to be a landlord in a 3 family who would want to live there, which would mean the loan would have to be brought current first, before the bank would consider repayment plan. And that would be a high monthly payment but maybe you're onto something. Any more ideas on the sub2 realm?