Need HELP On SS/Sub2 Deal
Heres the situition.
Property has a 35k 1st (unsure of arrearage amount)& 78k 2nd with 18k in arrears. Property is scheduled to be auctioned in 2 weeks. The current owner wants to stay at the property and pay me her current payment of 580 month for em to lease it back to her. I dont know the total amount of payments yet. She get 2600 a month, her attorney told me, from social security i guess. The house is in need of carpet and maybe 2k in repairs. It has a FMV of 160-180k.
The 2nd is foreclosing, need to pay the arrearage by next friday to avoid it going to auction. The 1st is in the process of foreclosure, and not sure of the arrearage, but the 35k is close to payoff.
I have it under contract already. The 2nd will not talk to me because they have attorney representation, so I had to talk with her attorney instead.
Should I sink the 18k into the property for this deal?
Should I let her remain there. She is an older woman 82, and I think just doesn't remember to pay the bills. Can there be some type of allotment set up to me from social security?
She also owns 2 other properties, that I have under contract. Payoffs on those are about 55k and FMV of 60-70k. But they have her daughters living in them, and i could lease back to them also possibly.
Any suggestions?
Tim
Tim,
You might want to be a little weary about leasing the property back to the owners. All the money you put into the property could be considered a "loan" if they sue you for taking advantage of them. Whenever I buy properties, I will not lease back the property to the owners for my own sake. If I'm getting a property for a good deal, then I don't mind giving them a cash incentive to move (or paying a deposit for them to move into an apartment.) Just be careful.
Tanya
Be careful renting back to previous owners. Some courts have viewed this as a "disguised" loan.
Like I said above, the lady is 82 years old, All she wants to do is to live in her house, and not move. I dont think sueing is in the picture, but I don't want her kids, who I guess are around 60 and going into foreclosure also, and I am going to try to help. I want to buy this subject to, but would like to help this nice lady out by letting her remain in the house, and just let her make payments to me. If not she is going to loose everything she has. How about stating a move out time of as much as needed, or something? HELP
Would she have to be the one sueing? Should I talk to her daughters about this and about their properties, or should I try to help her find a place to move to? I know you should make this personal, but I can't stand to see this 82 year old lady in this situition.
How about putting the 18k down as earnest deposit? and in turn it pays the arrears to keep it from foreclosure???
Tim[ Edited by bgn2fsh on Date 07/31/2003 ]
Just remember, compassion and business are two different subjects. If you are trying to help the lady out and you don't mind the possibility of losing your money, more power to you. Just be aware that the above stated risk is there.
Also, the house went into foreclosure due to non-payment. If she was unable to pay her previous mortgage payment of 580/month, how will she make these payments to you? Granted there appears to be more than enough money, but somehow it wasn’t making it to the right place.
-Chris
[addsig]
I would set up an allotment out of her account into mine on the 1st of the month. Then she woudl have what was left.