BiggerPockets

if you take over the first mortgage you will have to deal with the second mortgage - it becomes your headache.

So I would have it worked out before you agree to buy the first.

There are lots of threads on there that say some backs will take 5-10% and other say 50% - seems to depend on the bank and asset manager you get.

Also - the appraisal from a year ago is 100% worthless - I would spend a few bucks on a new one before you decide to move forward....also - it will help your case to show that it isn't worth that much.

I would get a better handle on the value first so you can decide if you want to proceed and then determine what you can pay in total.

You can do a deal with the first but make it contigent on getting the second one done - and I would be working on both at the same time

1. Find another house
2. Try to get the husband and wife on the same team. Having both on the deed is one thing - having both on the mortgage is another. Either way - it is a mess and if they are not on the same page then do not waste your time.
3. Find another house :)

As for what you can do to get them on the same page - well - try to talk with the hubby to let him know his credit is on the line as well - show him the benefits to him - not to his wife or to both of them - just to him.

He may be pissed at her and will take it out on the deal and himself.

This is really one of the biggest reasons finding another deal is important. Can't tell you the number of hours I wasted trying to get married couples together before I learned this lesson.

Also - $25 for a value check or $75 for a desktop appraisal before you spend one more min.

Oh, and for the second mortgage. Treat it like the first (same package, go in at 3.5% of the balance, and try to settle for 5 or 10% if the numbers work. Submit it as soon as you can, they will take just as long as the first sometimes.

I've had the messy divorce issues where one of the spouses is uncooperative. Find another house was a good piece of advice.

The second is in a very weak position if the first if foreclosing and the house is not valued way above the total of the mortgages. The second can be very flexible in that case. But not always. I had one property with 3 mortgages. The owner was current on the third but had defaulted on the first two. The third did not want to negotiate and so lost it all at the auction.

A few thoughts:

- A desktop appraisal normally costs me $50- $75. A value check costs me $25 (well I get them free now becasue I do a lot of biz but that is what they charge). Be very careful asking a realtor to do a BPO - a BPO and an Appraisal are two different things. One is what the price of the house should be to sell it in X days - the other is what the value of the house is on X day. With the new HVCC rules that most appraisers have problems following I wouldn't trust a realtor to do it. Having said that I wouldn't order either until you know all parties are on board and you want to do it. Why investors are afraid to order an appraisal (full or desktop or value check) is beyond me. That one small step of $25 - $75 can save your A$$. Well it has saved mine - let me put it that way
- Having him sign a consent order is a good step but you still need his cooperation - not just today - but throughout the process. I would still talk to him and lead him through a series of questions so he brings himself to the conclusion that this is the best thing for him. Not his wife - but the best thing for him personally. The marriage is over - his credit and short term financial future doesn't have to be.

But that is a step in the right direction - this is the 2nd or 3rd thread like this in the past 2 weeks and the common feeling was try to get the spouse on board but if you can't quickly - bail.

1. Get him to sign a limited power of attorney authorizing you to act as his agent regarding this property and have him give you last two months of pay stubs.
This will allow you to sign at closing.

2. Get a copy of the divorce filing. This can be used as leverage while negotiating.

3. Do a BPO to determine market value.

If the BPO comes in $410K or less then you have a short sale for both the first and the second. If the BPO comes in higher than $465K, then you can try and settle with the second lender while tying up the property with a contract and a memorandum of agreement.
If the market value is in between $410K and $465K, then it will not be worthwhile.

I agree with the others above in that unless you have a lot of experience, $50K in capital, and brass balls, you should walk away.

I wanted to make another quick point: Normally, I would focus on the BPO has my first step to determine my strategy. However, since there is a divorce in play, I would actually first move to see if the husband and wife will sign a POA. In my experience, any deal involving a divorce is risky and not worthwhile unless you employ a POA.