Now What?
I am trying to complete my first SS and I have the 1st Mortgage holder to take $51,000 for their $60,000 position. They are valuing the property around mid $80's (ARV) and needing $20,000 work. There is a 2nd Mortgage for $22,000. I offered them $1,000, the sale is in one week. They will not entertain anything less than full value for their note because they say the property is worth $103,000!!! I don't know where they got that # from. They are telling me that they are going to bid at the sale because of all the equity !!
What now??
The 2nd is HomEq.
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Swetbak[ Edited by swetbak on Date 12/01/2003 ]
Swetbak,
Dig into the details.. Ask the bank how they got their numbers! BPO?? If so, maybe you can convince them to get a second BPO because the first one was smoking dope. Then you can accompany that person to show them the true "as is" value. Now you can negotiate again.
Best Regards,
Bginvestor
Good post bginvestor.
Swetbak, I would go ahead and call the 2nd back and share with them that the first mortgage valued the property almost $25,000 lower on their appraisal, and it would be in the 2nd's best interest to simply order a new BPO to verify their postion. Base this on other lower comps that you find in the area and try to open the lines of communication again. You will have the most luck with this if you go around the L/M rep and go directly to the manager/supervisor due to the lack of time left.
Best of Success!
BAMZ
I got the address to their Value Review Dept and overnighted a letter restating the facts. I included an MLS report that shows all comparable sales in the Sub-division as well as the entire Zip Code. I also enclosed my estimates of repairs, a cd with pictures of the property and another letter from the seller which emphasized her previous efforts to sell the house. I encouraged them to contact me if they wanted to do another BPO.........looks like a waiting game,.....at least until next Wednsday when the sale is suppose to take place.
It's not suppose to happen this way!
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Swetbak
[ Edited by swetbak on Date 12/03/2003 ]
Sorry for the rude awakening, but this is the way it usually happens.
Go back to the first mortgagee and see if you can buy the mortgage for $51K and reserve the write to pursue the foreclosure. At this point, the minimum you would make is $9k in one week (beats fliipping burgers). Needless to say, unlike the bank ,you can bid up the property and make yourself a whole lot more money or get the property.
Hey swetbak,
Do you have any other houses in the pipeline? Like you, I will work every last breath out of a deal, and after I have thoroughly worked it at every angle with no success, I walk away and start working the next transaction. If you have others to work, you might reallocate your time to them.
Best of Success!
BAMZ
Sammyvegas,
Good suggestion. I already tried that. Their reply was that their "Note Sale" was a different process from the SS, and that there was not enough time to start it before the Sale. He also said that they won't discount when doing a Note Sale.
BAMZ,
I'm getting some calls. Everyone is in foreclosure and 4-6 months behind with payments around $1000. Too much money for me to come up with to make them current, even with a tenant buyers down payment. I could try to SS them, but each of them has a little equity and they aren't too bad condition. I doubt that I could get them to discount enough for me to make the deal work. I get my funding for the SS from a Private Lender who will only do 60% LTV.
Anyway, I got a call today from the original Loan Mit. officer (who had been out sick) at the 2nd Mtg Co. She confirmed that they had the property valued at 103k. She is going to follow-up on the package that I overnighted them and get back to me. At least someone is still looking at it on their end.
[addsig]
Hi Swetbak,
Glad to hear that you are getting some calls. Continue to work them, as well as continue to market to the others consistantly.
As for the properties that are behind $1000 or so, bring in a money partner and take those subject to all day long! You can advertise on the paper for money partners. Try running something in the real estate section like this:
Money Partner Wanted
14% Return Secured by
Real Estate. Call 555-5555
Try this for a few weeks. You may find some people with lots of cash, and you will definately come across people with $5-$10K. Give these smaller people a promissory note or second mortgage, and have them loan you the money to bring these current, take subject to and then L/O them.
Read this article about private money if you haven't already!
http://www.thecreativeinvestor.com/Article437.html&mode=thread&order=0&thold=0
Best of Success!
BAMZ
Hey BAMZ,
I have read your article. It's very good. I just don't feel very confident getting the payments from tenant buyers to cover the notes. My partner tried to L/O one of his rentals properties and had no luck for 2 months. He ended up renting it again for almost what the payments would have been for someone to buy. And it was a nice place in a desirable area and I thought priced too low, especially for a L/O.
Maybe I should focus more on finding buyers.
[addsig]