Sub 2 Quandry?
Good People - I am in the process of trying to do my first sub 2 deal . Seller is an older gentleman with poor credit who wishes out from under his current notes so he can return to his home state of Kentucky. The numbers as best I can tell seem to be as follows.
1st mortgage $62000.00 SPS Servicing 30yr
2nd mortgage $15000.00 HSBC Balloon due Nov 2007
Repairs needed $15000
Houses sold in the immediate area seem to have sold around $90000.00 - $95000.00.
Is therre any way that any one can see to do this deal with the above nunbers and still make a decent profit? Pay off 1st and SS 2nd? Perhaps SS both? Would the 1st noteholder have any reason to discount?
I am hoping to do this as a short term retail flip as the PITI is approx $810.00 month and I dont know that the local market will bear that and leave any room for positive cash flow.
Any advice and ideas that any experienced sub 2 pros can offer would be very much appreciated.
Much thanks in advance.
Tricky
How much equity is there in the property? In other words, what is the remaining balance on the two mortgages?
Do you have the financial resources to make the needed repairs to make this property marketable as a retail flip?
For the houses sold int he immediate area, how recent are those property sales? Are these sales comparable properties? What is currently on the market, and what is the asking price for similar properties?[ Edited by NewKidInTown3 on Date 03/16/2006 ]
Seems like a super tight deal to me.
Tricky,
I know this is your first deal and you really want to make it work, but look at it strictly from a business perspective and put your personal feelings in your back pocket.
You have no equity and feel that this property will probably not bring in enough to cover mortgage payments, property taxes, maintenance and repairs, insurance, etc. Now ask youself. Does this deal make sense? Good luck to you.
Da Wiz
Not sure if I follow ya. So you wanna take control of this house and sell it on land contract?
If so, simple....buy it sub2 and sell it Owner Financing to your buyers.
IF IF IF the number$ work out.
Would you happen to know any, by the way?
[addsig]