FHA Payoff?
I have a investor that is interested in buying a preforeclosure for buy and hold. Its a great property that needs no repairs and is rent ready.... the numbers are too skinny for me, however, this guy has quite a bit of down payment money..
Here's the numbers.
ARV 98k-100k
1st FHA: 83k (payoff as of this week)
2nd : Homecoming 28k
So if we can short the 2nd to 5-10%
83+28(.1) = 85.8k
Questions for the gurus: I'm going to ask, but do you think I have a chance IN HELL to get FHA to accept a payoff of just the principle less backpayments and taxes?? If so, the investor will jump on it.
78+2.8= 80.8k
Would this be considered a short sale? The seller is not living in the property so this disqualifies him to a short sale anyway.
Bginvestor
Vacancy would disqualify a short with an FHA insured loan, and, many but not all other conventional lenders.... Juniors criteria for short is generally less strict.... though they aren't overly generous with the discount.
Some conflict in your scenario. You say that it's in good shape, rent ready, but also indicate an After Repaired Value of $98 to 100, 000.
the ARV has no bearing in a short sale proposal... the only material number regarding value is the as-is, fair market value.
The FHA would accept a minimum net recovery from 82% to 87% of the confirmed, as-is, FMV. If you can denigrate the mortgagee's perception of value... you might be able to get a short with them... or at least use that as leverage with the seconds.
The juniors know that if the FHA lender agrees to a short sale, the approval is conditioned upon the juniors getting a maximum of $1,000 as payment.
Threaton an FHA short to the second. That might induce them to seriously consider your fractional offer.
Never make your offer in a percentage.
Make it an unusual number that gives the appearance that you've actually thought about it a bit... and not arbitrarily selected a discount of 10%, 20% etc.
Make them think you've done your homework and your offer represents the best possible number...
SSP, thanks for pounding this into my head. I've got it now!!