OfflineGood afternoon everyone! I found a very nice house with very motivated sellers. I just recently started building my tenant buyer and investor buyer list and do have people on both. Is there any strategy or formula I can use for someone who is upside down in their mortgage? I read 2 of Dean's books in May but don't remember anything addressing that??
The house is a 4/2/2 with a FMV of $93,000 and a mortgage balance of approximately $174,000
I know it's a tough one but was just wondering if anyone had any suggestions?
Thank you in advance to anyone who replies!
John
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John,
Are the homeowners behind in payments? How many if they are? You could suggest a short sale since they are upside down?
Where is the property located?
Laura
BMW Investment Properties LLC
www.bmwinvestproperties.com
John,
That is a pretty common occurance now and the only two possible outcomes are they approach the bank and restructure there loans or the dreaded short sale where you have to negociate with the banks to see at what level they are willing to reduce the mortgages. Its nasty but doable
George Towson
This is a tough one, but not impossible. That is quite a spread between FMV to outstanding balance, but as already stated you need a little more information. Restructuring of the loan or a short sale are options for this situation, but if they are not behind on any payments or going into foreclosure then the bank may not really be motivated to consider that. The bank could wait it out. Showing the bank an impending financial loss will be the motivating factor.
Think less, Do more, Get results. - Dean Graziosi
http://www.rcmfunding.com
http://www.StopForeclosureOptions.org
http://www.RichardsCapitalManagement.com
I would say this is not something I would spend more than 30 seconds on.
Looks like a short sale to me. Don't try to pound a round peg into a square hole just to get some kind of "DEAL" out of this. You will spend a lot of time with very little return. On to the next one!
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
Hi Laura. No they are not behind in there payments. They have a tenant in there right now. The property is in Florida. I was looking for a home for some tenant buyers in hopes of doing a lease with option to purchase but realize now that's not the way to go.
Thank you for your response.
Hey gtowson...Thank you for your input. That seems to be the general consensus.
Best regards!
Hey John,
Another approach that you "MIGHT" be able to do is an option to "Sub-to" with owner finance. The hard part about this is that the spread so far off, you would have to find the exact buyer that is really desperate AND really loves the house. It is possible but, not probable. You may want to, just to try and help these people, find an investor that specializes in Sub-to deals and send it their way. You can even make a partnership with said investor and you could split the deal on the front and the back. I live in Dallas/Fort Worth and Sub-2/Owner Finance deals are pretty lucritive here. I am actually working on a pretty hard case right now as well, not as difficult as yours but, still. Anyway, I hope this helps. Sometimes, people can't be helped as much as we would like to help them.
Billy
Hi Joseph. First, thanks for responding and your advice. I recognize what you said right away from Dean's teachings that since these people are not behind in their payments, the bank is really not motivated to re-structure the loan. They are current and have a tenant who is in there now and they,(the owners) were simply looking for a new tenant since the current one is leaving and I have tenant buyer who is looking so I was thinking of a lease to own. However, as you and others have pointed out, this is not going to work out because the owners are very upside down in their mortgage. And since they are in there, "Position", there's no point in contemplating a short sale since that will ultimately effect their credit. I suppose, even thought they don't want to continue to own it, they will just keep putting tenants in it and continue to pay their mortgage. Taxes are high, but it's either a break even or pretty close.
Thanks again for your advice! Have a great summer!
John Spardella
Hi Mike, thanks for the swift analysis and suggestion to proceed. Since they owners are not in trouble and there's nothing here for me or my tenant/buyer, I will move on.
Thanks again.
John