VA Short Sale
I have a short sale opportunity and need some help with strategy:
1st mtg: VA loan, $66k owed, $5k to reinstate.
2nd mtg: $30k owed, $1k to reinstate.
House is in perfect condition and homeowner does not have a compelling financial reason for foreclosure except for misappropriation of the mortgage funds to support bad habits.
As-is value of house = $85-90k
My original thought was to short or do an assignment of the second to make this a deal. I'm not sure that the 1st has enough reason to short and being a VA they won't short by much.
I'm thinking that I could get the deed, reinstate the first and short or assign the second (at a discount). I'd then like to retail the property and satisfy the 1st mortgage.
So $85k - 66k - 5K (2nd) - 3K (misc costs) = $11k . Not a huge payday but no rehab hassles. Any thoughts? What would you do differently?
Hi KevinIL,
You will also have to consider any selling commission and or holding cost in that equation. Based on the homeowners financials as you stated, it may or may not work. I move forward with teh most compelling proposal that I could wrangle up and present to the 2nd for a short. If they will short or assign their note to you, you may want to switch your exit plan to a L/O.
If you switch to a L/O, it will be easier to increase the selling price to your buyer by many thousands and eliminate any selling fees.
$11,000 isnt a real exciting number, but it is a whole lot better than $0.00
Best of Success!
BAMZ
Thanks BAMZ,
LO's interest me and I think you're right about the addt'l $$$. I haven't done one yet. I may have to consider it on this property.