Preforeclosure...need Help Fast Time Is Running Out!
I have a homeowner who is in preforeclosure...
scenario...Mr.X and Mrs. X did not have good credit...therefore, they gave Mr. X's father $60K to put down on a house June 2003. The house is in the father's name, and the son and daughter inlaw have been renting from father.
The father lost his job July 2003, who lives in another state. No payments has been made since the purchase date of June 2003.
1. $3400/Monthly mortgage.
2. $17,000-$22,000/Reinstate (this may include Dec. pymt)
3. $410,000/Payoff
4. $399,000/Current mortg. balance
5. $459,000/Original purchase amt.
6. $480,000/FMV...homes in the area are selling for high $400k-mid $500k.
Mr. X and Mrs. X can afford the monthly mortgage...but do not have the $$$ to reinstate...they are both working...wife just got a job will bring in an additional $2000k/month... The father who is the owner can not pay the reinstatement because he doesn't start new job until Feb 2004.
Mr. X and Mrs. X are wanting to stay in the home and lease option for 12 mos to establish credit and show 12 mos pymt history.
I am thinking of doing a subject 2 and lease opt. I personally do not have the $$$ to reinstate, however, would be interested in assigning the deal to an investor who would be willing to do a lease opt...
The house is in great condition...fifteen years old w/new roof...6bd/5ba.
I hope I'm in the right area to post ...I'm looking for any interest...please PM.
Hi millionaireinthemaking,
Help me with your figures first. You say the
Mortgage Balance is $399,000
REinstatement is $17K - 22K
and the payoff is $410,000.
What numbers am I missing here.
Lets say the total payoff is $420,000. If there is only a $40K - $60K spread, most investors wont touch that with a ten foot pole. For me personally, I would want that kind of spread ($40K-$60K) to be on a $200,000 house.
The numbers on this deal are not very exciting, so there may or may not be a deal here for you. If for some reason you bought this and had to list it to get out from underneath it, the mortgage payments themselves could eat you up, let alone paying a RE commission of $30,000 or so to sell it. There is a lot of risk and little reward in this one. Make sure that you think this through!
Best of Success!
BAMZ
BAMZ,
thanks for the ensight....
Yeah Bamz,
and just imagine having to hold that property for 6 months due to you not being able to rent it or whatever..thats 20K you should be holding aside "just in case". Also check the comps in that area..might want to see how many of those half mil homes are actually selling on the market and how fast. I mean its not like you got a lot of room to work with as far as being negotiable to make the price appealing. Man the more I think about it the worse this deal could get...LOL..personally I agree with BAMZ, I would have to kick dust on that one.
JMO
Benny
Benny
[addsig]
The name of tha RE game is TIME and CASH. Options make you (some) money with no money but the question is ... how much can they make you in the hot sellers market? At list this is how it is in So. Cal.
To me the East Coast is to far to be involved in a tide deal like that but maybe if you find the money somewhere for reinstatement and if the property values in that aria is steadily climbing with at list 7% apreshiation points a year, you can reinstate the 1 st mortgage, have the owner sign you over the deed and you lease option it back to them. After you ad the cost of your investment in the house and interest on the top of the original mortgage that stays in their name, the question is if they are going to be able to keep up with that new and significanlty higher payment. Well, if they do, you not only tried with nothing to lose but you made some good interest earnigns - while helping peole out. In case if they dont pay you, you'll kick them out for the violation of the non payment claousule of the lease and that's it. You owe the house which by that time might mean a 100K equity, which you take as a line of credit an use it for the new investments. Hey, chances favor prepaired mind!
If that's to much hasle for you and you don't have the moeny, then sign up for one of those fishing boat trips/jobs in Alaska, make some money and then come back and hasle some more RE deals with some moeny in the pocket.
omega1[ Edited by omega1 on Date 12/18/2003 ]
Bothers me that they could put 60 grand down and never make a payment. If everything worked as it should an investor could make some good return. It is that what if that always gets you. The big one here is what if they still do not make a payment. Stuck like a fat pig trying to get them out. Cost another $7500 in more payments and then they may go crazy and tear the place up and get their 60 grand by taking the carpet, appliances, doors. pool equip and the kit sink. Seen it done mucho times senior. With big numbers you need big bank roll. No way JOSE
Good LUCK and HAPPY HOLIDAYS
Hope this helps some
Ted Jr
at quick glance, this MAY be a rare instance to lease option or rent back to owners in preforeclosure...however....I would say 99.5% of the time you NEVER want to even entertain this.
Do you have proof of her extra $2k a month? How do you know you want get stiffed like the bank did?
YOu have to ask these questions, Dave
I would run away from this one. Just not enough upside to cover the possible downside.
I would run away from this one. Just not enough upside to cover the possible downside.
hrm why do they have two of the same icons up at the top left when you make a post???
any way, the spread for the home isnt much to be excited about. especially with a home worth a half jillion... i'm not saying its impossible to sell but like all the reast said, holding cost will litereally tear you up unless you got the money to hold it. profit margin wise, maybe you can do an option with them for 3 months, and try to find a T/B or buyer who would be willing to put down enuff of a down and make monthly payments to reinstate the loan.
just an option
[addsig]