Short Sale And Lease Back To The Tenant?
I was hoping to get advice on the following deal.
I have willing seller who is in a decent doublewide in rural NC. The property is worth between 60-80K. They owe 88K, and are in foreclosure.
There are lots of characterists that should help a short, including the property being on family land, the house bing in so-so shape, it being in a very rural area where houses sit for a while, etc.
The owners recenly got out of a health-related bankruptcy, and are now back on their feet. Mom recently started nursing for $30 and hour, and says she will have no problem making option money or payments.
We want to short the double wide to $30K, and L/O for 80K with 4K option money for 24 months.
Does anybody see anything challenging to:
1) getting doublewides shorted with 50%+ discounts?
2) leasing back to former owners?
3) the tax issues this would create for the seller?
Any advice appreciated.
What is owed on the MH? Was the land it sit upon offered as collateral, too?
If the Borrowers are going to seek short sale consideration, they should not disclose the fact that they intend to remain as a tenant. This agreement should not appear in any documents offered to the lender, but should be by separate agreement.
They owe $88,000. Tax Value is $89,000. And their oringinal balance was $66,000.
I agree on keeping any lease and option agreements separate from short material - good advice.
The land is offered with the MH.
As we know, the TAX VALUE is generally not representative of market value. In theory, possibly there is a corrulation but in practice, Nah!.
If it's really worth $80,000(?) why would the mortgagee agree to accept $30,000?
Answer: They wouldn't.
I hear you. The tax value isnt that relavant. We dont ussualy work with MHs - and I think Tax values are less relavent with these sorts of proerpties. Do you know anything about MHs and shorts? I hear stories about banks having to take back 90K notes and sell the proeprties for 30K, but I dont know how common they are.
Thoughts?
Also,
The property in its current condition may be worth more like 50K. Give or take.
A
There are guys who specialize in Deals On Wheels, but, frankly, the short sale theory works on ANYTHING.
You really have to have more than a ballpark idea of value before you can prequalify this as having potential for a short sale.
In addition to the land the trailer sits upon, was anything else offered as security for the loan?