OfflineOK, this is going to be real quick. I'm new to REI and this is my first post. I'm very nervous and full of fear. So I'm going to post this and hope it make sense. I'm not going to reread it because I know I will just delete the posting. Here goes. I was calling FSBO, trying to get the "Fear Monkey" off my back. I called an out of town number and the spoke with the owner of the house. To make a long story short. The owner lived out of town and hasn't been back to see the house in 2 years. He just wants to get rid of the house. I asked if you wanted any funds to pay bills or go on vacation. He replay was "NO" I'm sick of this house and I just want it out of my life. The note on the house is 71K and it has back taxes of 3K. I don't know if it has any liens on the property. Again, I don't know what I'm doing. All I know is I need a change in my life and I know RE is the answer. I don't have much money and my credit is on one leg. I don't know where to start or what to do next. Any help WILL BE GREATLY APPRECIATED.. OK I'm going to push the SUBMIT button now before I lose my nerve. THANK YOU
"Get Me Out If This Note, You Can Have the HOUSE"
Posted on: Mon, 01/09/2012 - 03:37
"Get Me Out If This Note, You Can Have the HOUSE"
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- by CHAPMAN
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Do you know what you can sell it for after the property is all fixed up and ready to go?
RENinja
"Remember, success is a journey, not a destination.
Have faith in your ability."
Bruce Lee
What is the place worth after you get it ready to sell?
How much and what are the cost of repairs?
What if the place is only worth $70,000 and needs $15,000 in rehab? Not much of a deal there. Now if it is worth $135,000 and needs $10,000 rehab than that starts looking like a deal.
So you need to figure out what its worth(what it will sell for)and what repairs are needed is your step #1
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
Madeline...first of all, relax. A lot of us have been there and done that. The first thing to do is, as Michael said, figure out what the house is worth in relation to the $71k note. This will determine if you have a deal or not. Then look at improvements 2 ways...1, minimal fix up required to rent and will the property cash flow, or 2, amount needed to rehab for a retail sale. Once this is established, you will know some options to pursue. If the house is a deal, you can
1. wholesale it to a cash buyer or,
2. have the seller sign the deed over to you subject to the existing mortgage.
If the seller deeds the property to you, you can either rent it out, or sell it to another buyer on a land contract. If the seller doesn't deed you the property you can lease/option it, all provided it is a deal to begin with. You can stipulate in the contract that it is subject to you finding a tenant or a buyer in 60 days. If you can't find a tenant or a buyer in 60 days, then you don't have to buy the property. So about the only thing you are risking is whatever you would spend to market the property.
Now, regarding the $3000 in back taxes...those may or may not have to be brought current. You need to check with your local tax assessor and find out how far the taxes have to be delinquent before the tax assessor takes action. In my area, they don't take action until the taxes are 5 years past due. So you may have some time until you have to pay the back taxes, or you may only have to pay one year's worth to keep it from being delinquent to the point where the assessor will take action. However, if you let the back taxes accrue, there may be interest and penalties adding up the longer you take to resolve the back taxes. But you most likely won't have to come up with $3000 for back taxes to close the deal. The other concern is if the seller is current or behind on his payments to the lender. In that case, it may be a candidate for a short sale where the lender may take less than what is owed on the property. But the first thing to do is establish the value of the property. The big thing is you overcame your fear to take the action of making a simple phone call. Now you have something to work on, finding the value of the house. just take it a step at a time. There are a lot of people here who are willing to help you and try to answer any questions you may have. Best of luck.