Possible First Deal...Need Help
Hi all,
Here is the deal. Just had my first conversation with my first motivated seller. It was a brief discussion but here is what I learned (was very nervous so missed gettting a lot of important info):
1. FMV ~ 220K
2. As is = ? (haven't seen the place yet)
2. Owner Claims 90K in equity
3. Owner claims outstanding mortgage amt. ~ 100K
Owner has a disabled wife, 2K in medical bills, a second note from another person of 18K and has filed for Bankruptcy (Ch.11) but I couldn't understand if he is still protected under it. In my excited state, i didn't get the mortgage monthly payment amount and how many months past due!
Auction is in 17 days. From the information above, can someone please chime in as to my next steps, how bankruptcy effects the process and what my workout options are. My initial thoughts were to do a sub2
As you can see, I am still a bit green at this but think this can be a great deal (pay him 110K: assuming no other liens) and take over deed.
Thank you all in advance for your input!
Hello.
First, calm down.
Second: Confirm the value by seeing the place and pulling comps.
Third: Confirm all the liens by getting a title company run a preliminary title report or go to the recorder's office and look those up
Fourth: You need to make sure that the house is not protected by bancrupcy. You have to talk to a RE attorney and have them look over the bancrupcy paperwork or talk to the owner's bancrupcy attorney.
If everything looks good, agree to pay the owner some money for the equity. Have him sign over the dead. At this point you are the owner and can refinance, rent it out or sell the place.
Good luck.
Well,
Just wanted to update all on this 'deal'. As some of the experienced investors know, a deal is not a deal until all is signed and you are holding the title on this property. In this case, after a few phone conversations with the owner, he has completely disappeared. I have tried reaching him a few times but he doesn't return the phone call. I believe this deal is dead and I am sure this will happen more times in the future. Just seemed very promissing at the beginning. Oh well, on to my next lead!
Thanks.