Offlinesent out a bunch of mailers to homes I got off of 4closurealert.com and received a call from a gentelmen two days after sending them out!
Here's the down low:
Owner knew he was headed for financial trouble due to economy and business going bad(nightclub owner) so he reached out to lender who told him the bank couldn't help because all of his payments were being made. So he didn't make payments for three months and filed paperwork with lender to have mortgage reduced. He was outside of the bracket by $100 so he filed additional papers with lender to see if that would help. All of this took bout 3 months so he's 6-7 behind on payments at that point. He's made on payment to lender in about a year and it still hasn't gone to complete foreclosure yet.
-He is $11,295 behind on payments
-Payoff was 118k but now 133k with penalties and fees for not paying mortgage
-Had two mortgages on home but the second he apparently will not be penalized for or held accountable for...he says...don't know why? Anyone?
-Totalviewrealestate.com says home value is about 136k
-1st mortgage payment is just under 700/mo. both loans were just over $1200/mo.
- He wants to stay in home but now is to far behind on payments and can't make up over 11k in back payments.
-Now that his 2nd loan isn't an issue he wants to stay in his home if possible because he can cover 700/mo.
-He understands I need to make money but REALLY wants me to let him stay in the home if the backpayments are made..don't know about that!!
Should I purchase subject to or lease option?? I keep finding homes with owners that need help but their monthly payment is either to high or they owe to much in back payments!! This sucks because its hard to find someone who can pay down over 11k or pay close to 2k in monthly payments.
WHAT SHOULD I DO? HOW CAN I MAKE THIS A WIN-WIN AND SHOULD I FIND A WAY TO LET HIM STAY IN HIS HOUSE OR MOVE OUT FOR TWO YEARS BUT HAVE THE OPTION TO COME BACK ONCE THINGS ARE BACK TO NORMAL FROM HIM.
From my view he will have to move out in order to give me a chance to make up his back payments. I could flip it to an investor but then it would be a short sale and hurt his credit for two years and I wanna make it a win win. WHAT TO DO WHAT TO DO??
Me some advice
I dont know about this, I understand your trying to find a win win situation for both of you but by him wanting to save his credit even if the damage is 2 yrs, to me that would be a win win on his part making it seem just a little bit better for him only making you worry just a little more on the deal. On the other hand if he moves out you will definetaly have more room to make the income back and save his name basically making it an even win win for both of you, Which would only make him worry about relocation which you can also help out with
Thats my opinion! looking forward to hearing some more comments.
Good luck...Luis
From the guy. He says the foreclosure goes to the courthouse steps the first week of august and he has an apartment he can get into mid july. Since he's 11k behind on payments if I could make up even half the payments from a tenant and keep the renter in the home would it still go to "courthouse steps?". Or would the bank accept making up at least half the payments as long as payments are continuing to be made? Should I ask the homeowner to request that I deal with the bank? How should I approach the contracts with this deal?
Thanks for comments ethikz310! Very helpful
If i was were you are at, And really wanted the home I would try the bank but have them to remove the penalties. But for me myself i don't see good enough numbers for me personal to move foward. And I never let the person that are in the house stay.
Randy
www.adeptpropertiesllc.com
I do believe I can get it rented for 800-900/mo. Its the 11k that presents the problem.
No web site such as total view, zillow, ciber homes, etc. etc. can supply you with accurate enough info to base the true value of the property. They just provide a base line. That house could be worth $120,000 or $175,000. You can determine this by getting comps on properties like the one you are looking at( same Sq. Ft. same bedrooms, same baths, garage etc, etc,) 3 types of comps are what I look at. Sold in the last 90 days, currently for sale and under contract. All located as close as possible to the property you are looking at. What if you get great numbers but houses in the area are taking 120 days to sell and there are a lot of them for sale? What I am getting at is you need to know what the property is worth before you start to work numbers. Does this place need work? That would affect your offer also.
If you are going to rent, hows the rental market in the area you are looking?
Vacancy rates? Do you have a tenant lined up? Otherwise you make the payments until you do.
The bank will only accept full payment for owed mortgage payments, you may be able to negotiate the penalties. To stop the foreclosure payments must be made current. DO NOT give any money to the seller and never let them stay in the property!
Think about this one, you said you could flip this to an investor but it is a short sale. How would you make money doing this, what investor would do this and what would be the process? This property can provide valuable knowledge for you.
What happened to the 2nd on this one? I don,t see a reason to work this one from the info you provided. On to the next!
Hope this helps,
Michael Mangham
MD Home Acquisitions LLC
Knowledge is power, but execution trumps knowledge. Tony Robbins
http://www.mdhomeacquisitions.com Seller site
http://www.mdhomeacquisitionsbargainhouses.com Buyer site
http://www.mdhomeacquisitionshousehunter.com Bird Dog Site
http://www.mdlodeals.com Tenant/Buyer site
You said that he was 11k and he still owes 118k for a grand guesstimation of 133k and a few websites are saying the home is only worth 136k.
Thats only 3000.00 in equity and who knows how much he owes on the second. Sounds to me This guy is upside down.
Even if you were to assume his mortgage. You would not be able to make a sizable profit.
What I would do is point him in the right direction. He only has about 3 choices left.
#1 contact the bank loss mediation team and see if there is a work out they can do. I dont see them doing anything due to him failing to make 1 payment during the last 12 months.
#2 Bankruptcy. this will probably buy him 2 months before the judge turns it over to the bank.
#3 Allow it to go to foreclosure. Here is your shot at buying the property at a lower price. you could bid ,,, my guess no greater than 100000.00. If your the winning bidder. dont waste time evict him right away . He has all ready told you he wont make payments what make us all to believe he will pay you.
Kind of harsh I know! but whats your best interest here? Helping someone who didnt try to resolve his own problem or your bottom line?
When Life comes down to push and shove.. Its time for a 1 Ton truck.
- The Belt Group -