BiggerPockets

I have a contract from a motivated seller that was 4 mos. behind. It was a purchase contract with it contingent to me finding a buyer. I was trying to find someone to rent to own this house, Here is the scenerio.
Purchase from seller:
5 BR, 3 BA on 3 acre.
House was recently renovated from insurance money.
Looks new and ready to move in.
Buying for mortgage amount of $187,000
Appraised for $250,000 in 2008.
PITI of $1,850 mos.
2 yrs left of Prepayment penalty.
$7,000 behind

Sell to buyer:
via rent to own asking $1,850 mos with $10,000 down earnest deposit.
Selling price of $229,900

I marketed for 1 month before the bank took it and winterized the house. Only 6 bandit signs were used and I received an average of 8-10 calls a day on this one house. Damn, those sign work well. No one bit the hook due to the high monthly payment or down payments and to most, Both. Well guess what? I have plenty of buyers for lower priced houses when I do a rent-to-own.

Anyway, I've been talking to the bank with the house to see if I can make an offer to them. I offered them $115,000 two weeks ago when they called, but said that offer was too low. They finally called back today and said if I want it, they'll take $160,000 and no less. I thought about it and asked them to pay closing cost at that offer. They want me to put it in writing and they'll most likely take it. That's $27,000 less than what is owed to them.

I know I can still sell it on a rent-to-own or seller financing for $229,900. That's a $69,900 profit.

My question is, is this a good deal?

How can I purchase this house from the foreclosing bank without putting my personal guarantee on this house?

Should I pursue this?

Is there a creative way to buy this house?

Let me know, Thanks

It does not seem highly likely that the property value has only fell a little over 10% since 2008. Secondly it does not seem highly likely the bank would take a 14% loss and leave $69k on the table.

That being said, to answer your question, if you conventionally finance it, they you will have personal recourse. Assuming you do not have access to a commercial line of credit with no recourse. You will have to put money down to finance it as an investment property.

You had the correct idea of finding a exit buyer via contract assignment or some sort of wrap but if the bank will not allow an assignment then you might have to take the house on personally and re-sell.

Thanks for all the responses.

The banks took it back close to 6 months of non-pay. It is a small local bank that I've been keeping contact since I signed a purchase contract with sellers. The loan officer kept me in the loop when something happened to the house.

I had plans on buying via conventional financing, but don't really want to go that route. Don't know how to go about this transaction without tying up my personal resources, as I'm getting ready to build a home for myself and currently rehabbing houses with the little amount of money I have left.

It's just too much money to leave on the table.

I know I can get $230k via seller financing. No way under conventional financing. Therefore, I'm stuck on how to go about this transaction with the bank.

Anyway to acquire this house from bank using creative means?