Short-Sale Pros, Pl. Help
The details of the deal;
FMV - 165 (based on comps. Comps are between 165 and 240, taking a conservative approace and assuming the fmv=160)
1st - about 110k
2nd - about 25k
Payments and arrears - about 40K
The owner wants moving money about 1-2k
This is the first time I will be attempting a SS.
Could short-sale pros out there suggest on things to do and things not to do to have a successfull SS.
I really appreciate all input.
What is your objective? What is your exit strategy?
What are the total payoffs for the first & second? Your info is unclear.
Are there any other liens against the property or the Sellers?
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The balance on the first is about 110k and the 1st will be advertising in the legal paper to foreclose the property in September. Which means we have enough time to do a SS.
We definitely can get the 2nd to discount to may be 10%. There is about 5k repair (cosmetic only, paint, carpet, etc) The biggest problem, I think, will be to get the 1st to discount/waive the 40K in arrears.
I already have a buyer who is also an investor lined up, ofcourse, only if the numbers make sense.
I am planning to offer the 1st 110k and hoping to get rid of the 40k in arrears.
Discount the 2nd to 2k. That would put me at 112k + closing cost?? (may be about 2k), with repairs at about 5k, I hope to be in the property at 119k which is easily worth about 160k. The difference is about 40k and the investor has agreed to foot in all the money for this and give me 20% of the profits.
The seller doesn't have any other liens on himself or the house.
you better be very clear that your homework is correct on this one - anyone that can talk their way to 40k in arrears on a 110k loan has to be VERY smooth! what is that, like 2 years of paymnets?
Check for other liens against the property and the owner, I'd be $2 there will be something lurking.
This person owes 175 on a house worth 160. your SS idea with the 1st getting 100% principal could very well work.
Just make sure you know each and every encumbrance and don;t face any surprises.
My bad. I asked directly WHAT WAS THE TOTAL PAYOFF and I assumed that her response of $110,000 included the past due, and WAS the total payoff. Guess my question should have been more direct.
Even if the payoff is $150,000 on the first, they probably won't discount much... but the possibility with the second is looking much better.
That was my question. I know if the 1st forecloses the chances of the 2nd agreeing for a discount are great.
The owner has not been making pmts for couple of years, I think(I got this lead and will be meeting him for the 1st time tomorrow)., because of medical problems.
If there are repairs (may be couple of thousands), my question was what are the chances of getting the arrears on the 1st (which is about 40K) discounted. I did some research and found that there are liens of about 4k more. So as long as the owner is concerned he OWES 176k(110K+40k arrears on 1st+22k 2nd +4k liens) and he is ready to walk with u-haul money.
If the 1st doesn't discount at all then we will be 150k+closing cost(about 2k) and repairs(about 5k) which is about 157k. Add to it 2k(assuming the 2nd will take 10%) then we will be in it at 159k on a house which is worth about 160K. Not a deal at all!!!
However if the 1st doesn't discount at all,
then their cost will be 150k + Attorney fees+real estate agent fees + fixup fees + holding costs. which could be more than the FMV. So do you pros out there still think that there isn't a deal here????.
If the first is owed $150,000 and the place is worth $165,000....
Do you know if the first is an FHA insured, VA insured, or a conventional?
If it's an FHA for example, they'll consider a net of $135,000 (on a $165,000 value)and require that the juniors settle for a total of $1,000.
The mortgage type on the CMA indicates that it is FHA
Also, how did you come with 135K on a 165K loan??
Thanks
>Also, how did you come with 135K on a 165K loan??
Because 135k is 82% of 165k (FMV). This is the set in stone bottom line for FHA as I understand.
-Chris
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