Short/Sub2 Or NOT?
Got a lead from my web site that's basically this:
Quote from seller below:
OK, where to start. Right now I am living in the house. I have plans
to move out on May 8th. He was supposed to take care of all of this
house stuff months ago when I filed for the divorce. Of course he did
not! No, I will not be able to make payments on the house and my new
apartment. So, as you can see I am in need of a quick way out. All I
want is to break even on the loan if that is even an option.
Home info:
NumberOfBedrooms: 4
NumberOfBathrooms: 2
SquareFootage: 1751-2000
Basement: None
Carport: No
Garage: 2 Car
LotSize: < 1/2 Acre
Stories: 1
AgeOfHome: 5-10 years
IsHomeOccupied: Yes
IsHomeListed: No
MonthlyMortgage: 1247.00
EstimatedHomeValue: 118,500
EstimateRepairsNeeded:
FirstMtgPayoffAmount: 104,000
SecondMtgPayoffAmount:
CurrentOnPayments: Yes
OwedForBackPayments:
ReasonForSelling: divorce
UrgencyToSale: ASAP
Comments: Please help me!
OK, I at least got the motivated seller signals :-D
The seller is in Katy Texas and I'm in Austin. The comps I was able to get are from Harris County Appraisal District. They update once per year and pretty much are useless. However based on those comps I put the house at more like 110k. Listings in the same subdivision are in the 110 to 140 range.
My experience is:
Have owned 4 investment properties and had property managers for two. Working through William Tingles Sub2 course and GET IT. Haven't done a sub2 or short sale. Limited knowledge of shorts except for everything I've read here.
I don't know the Katy area and only have a vague handle on home lease prices. Given all that, I know that I should be looking for 25%+ equity deals. So I'd have to sell it for 138k to make those numbers work for those ratios.
Finally, the question is:
Should I sub2 then LO?
Walk away because I don't know the area?
Bird dog it to another investor?
Try to short sale the existing, current mortgage?
Give up real estate investing for alligator wrestling? 
The seller is very motivated and I'd not only love to help, but do it in such a way that I don't take it in the shorts and mitigate the majority of my risks in the process.
Thanks in advance for reading such a long posting.
Gary
sub2 then LO
or
Bird dog it to another investor
I would sub 2, get 4 comps of the area, and lease for a profit, the lease would be 12-24 months. Don't walk away from the deal. :-x
Just so everyone knows, I bird dogged for a fee. William T., I gotta know...what would you have done?
Thanks,
Gary
I would have took it over sub to and then sold it.
Hello!
I noticed that a lot of you said that you would do a 'Subject To' and then sell it. Could you please tell me how you would structure the deal as the monthly payment seems to be high ($1247.00)?
Thank you!
Gary,
I would have passed or done the same thing.