OfflineHi everyone, I was wondering if anyone knew of any win win scenario in which you could put a deal together with a highly motivated seller in an upside down mortgage?
Thank you in advance to anyone who takes a shot at this!
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Can I Get Some Advice On Upside Down Properties?
Posted on: Mon, 06/06/2011 - 20:00
The only thing you would be able to do with a property that is upside down, is see if the owners would be willing to do a short sale. First the home owner would need to be willing to sell their property in a short sale, which would damage their credit. A short sale is a better alternative than a forclosure for a home owner in trouble. Trying to negociate a short sale from the beginning can be a long frustating process. With all the deals that are out their I would look for deal that would be easier and faster to move on.
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that does a LONG term lease sandwich option on these properties. They are 10-15 year lease options. He then gets l/o buyers off his buyer's list and does a long term lease option to them.
His name is Ranger16 on this site.
They have bad credit, so buying a home under a l/o is music to their ears and they are not so concerned about the price, and the sandwich lease is done for a 5-14 year lease option. This takes into account that the property will appreciate in value within the 5-14 years. HISTORICALLY, LONG TERM, real estate even appreciates during a down turn.
When you do this, make sure you understand how mortgages work. The amount credited towards the L/O purchase price, if anything, should be less than the amount the principal is being paid down each month. AND, it is important to set up a 'loan servicing' company to handle the payments so the payments from your END lease optioner go into the fund that will pay the seller's (who's lease optioning the property to you) mortgage, taxes and insurance.
When doing this, if they are behind in payments, there will need to be made a way to make them current. This might need to be cash you have, or can get via using other people's money. (OPM)