Help! Need An Advice On A Deal Quick!!!
Hello everyone!
Folks,
I need an advice on the possible deal that I just came across. In a short version the situation is as following:
Homeowner just received a Sheriffs Sale notice for the first days of January 2004. He is 14000 behind on the first mortgage and also owes some municipal taxes (not sure how much exactly at this point, but will find out). He already filed Chapter 7 bankruptcy last year that was discharged. He is also planning to file Chapter 13. Homeowner claims that house is in a good condition and was appraised in June at 170,000 with balance of 110,000 on the first mortgage.
Now,
I understand that “all sellers are story tellers” and I would need to verify all this info before going forward. However, homeowner desperately wants to save his home (which is in my understanding is not an option since his credit is bad and he can’t refinance). What could I offer in this case in order to create a win / win scenario and also make some profit.
Need an answer quick since time is running out. By the way, if the homeowner is truthful and there is so much equity in the house the Short Sale in my understanding is not an option.
I would really appreciate an advice since deal looks very interesting and owner willing to work with me.
Thanks in advance,
PerlUser.
What do YOU want to do? Do you have the resources to purchase the property?
Can you purchase quickly? If the Seller files a Ch13, the sale will be postponed, but you would need Trustee permission to enter into a contract to purchase.
You are right in that if there is substantial equity, the lender wouldn't consider a short sale, especially this close to Sheriff's Sale. It's likely that the bidding will approach or exceed 75% of the property's as-is, FMV, so the Plaintiff will certainly be made whole as a result of the Sheriff's Sale.
You must determine how much is owed, and what the as-is, FMV is. The referenced appraisal was probably for the benefit of a subprime lender's application to justify a mortgage loan refi... so it's results are suspect.
My suggestion? Offer the Seller 50% of the net equity. That might motivate his cooperation.
ShortSalePro,
I have access to cash and can purchase quickly. My intent is to flip the property in the shortest possible term. Assuming that all variables described by homeowner are correct and I offer him 50 % of equity what would be the acquisition strategy in this case and possible profit? I would like to avoid a seasoning issue in order to resale quickly. Wouldn’t the subject 2 be a better approach?
Thanks,
PurlUser.
If you've approached REI as a business, you should already have your team in place. If you don't, what are you waiting for? Your team should include lenders, title companies, home inspectors, termite guys, moving companies, etc. Seasoning should be a non issue if you've already located a conventional or subprime lender to whom you'll be sending potential customers.
If you aren't prepared, then you've got and will continue to hold a tiger by the tail. Have your team in place and you can cookie cut the process.
I'm not an advocate of Sub2, so I won't speculate if 'that's the best way to go..."
However, you could simply purchase the Seller's right of redemption AFTER the Sheriff's Sale and redeem.
An idea with right of redemption looks like an interesting alternative if the homeowner won’t agree to sale before Sheriffs Auction. Hm-m-m…. what should I offer him for his ROR?
By the way, I DO have my team in place. I was looking for the best approach to this situation.
Ladies and Gentlemen, are there any other ideas that may work in this case?
Thanks,
Purluser.
If your mortgage broker referral network is in place, meaning, where will you direct your Purchaser, then there should be no seasoning issue... since you've already hurdled that obstacle.