Need help with a deal Im looking to wholesale!!

I have a home owner that contacted me saying that he is getting a divorce with his wife and they are both on the mortgage. He is looking for 25,000 now to pay his wife and she is willing to get her name off the mortgage. He is willing to sell his house in 4 yrs and currently has over 100,000 in equity. He had his house on the market for 265,000 but has then taken it off and is keeping it for 4 yrs. Any idea how I can wholesale this property and will it be worth dealing with this?? Thank you in advance for your feedback.

Edited: 06/26/2010 at 11:20AM

Scott R.

Real Estate Investor · Amarillo, Texas

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Icon_minipost Jan 24 '10, 04:36 AM

One problem I see is its not just as easy as paying the ex and house being his, if theres a mortgage on the house in both names the property would need to be refinanced. What is special about 4 years? He has $100,000 in equity, so is he willing to sell for what he owes plus his wifes 25k? where does that $265k price tag come from? arv?

Edited: 06/26/2010 at 11:20AM

Gregory Harris

Real Estate Investor · Chanute, Kansas

40 posts
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Icon_minipost Jan 25 '10, 03:48 PM

Is he willing to take a cash offer and let it go now? Are you taking over the payments or anything like that? This sounds more like a subject to deal than anything you can wholesale outright and a 25k down payment is awful steep for that. Without knowing anything else you should really find another deal because this has too many time,money, and other contingency issues.

Edited: 06/26/2010 at 11:22AM

Jon Holdman

Real Estate Investor · Denver, Colorado

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Icon_minipost Jan 25 '10, 09:30 PM

Hard to wholesale a deal the owner is unwilling to sell. Four years, forty years, not much difference.

What this guy is really looking for is a $25K loan. If his income and credit is OK, and he really has $100K in equity on a house that's worth something south of $265K, he should be able to go to a bank and refinance. He must only owe $150K, and say its worth $250K. A $180K refi in his name only is a 72% LTV loan and nets him the $25K to pay off his ex.

If the values are there, and he can't do this deal at a bank, there are other issues. In that case a private second might work out. It would be a $25K loan with a four year balloon secured against the property, with the understanding you foreclose if the payments aren't made or the balloon isn't paid off.

I wouldn't do it. I suspect the value isn't there. If a bank won't refi him under the apparent circumstances, there's more to this story than you know. Plus, a private loan to a homeowner has too much emotional baggage. When the deal goes belly up, he with fight you to keep the house.

Edited: 06/26/2010 at 11:22AM

Jon Holdman, Flying Phoenix LLC

Dan Favor

Rehabber · Howell, Michigan

34 posts
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Icon_minipost Jan 25 '10, 10:09 PM

Originally posted by Jon Holdman

Hard to wholesale a deal the owner is unwilling to sell. Four years, forty years, not much difference.

What this guy is really looking for is a $25K loan. If his income and credit is OK, and he really has $100K in equity on a house that's worth something south of $265K, he should be able to go to a bank and refinance. He must only owe $150K, and say its worth $250K. A $180K refi in his name only is a 72% LTV loan and nets him the $25K to pay off his ex.

If the values are there, and he can't do this deal at a bank, there are other issues. In that case a private second might work out. It would be a $25K loan with a four year balloon secured against the property, with the understanding you foreclose if the payments aren't made or the balloon isn't paid off.

I wouldn't do it. I suspect the value isn't there. If a bank won't refi him under the apparent circumstances, there's more to this story than you know. Plus, a private loan to a homeowner has too much emotional baggage. When the deal goes belly up, he with fight you to keep the house.

"Hard to wholesale a deal the owner is unwilling to sell. Four years, forty years, not much difference."

Hard to argue with that, But remember in the big D situation, things can change at the drop of a hat. Get a peek at the divorce decree... and let your client know you are there for them.

Edited: 06/26/2010 at 11:22AM

Jim Wineinger

Real Estate Investor · ten mile, Tennessee

1501 posts
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Icon_minipost Apr 20 '10, 12:40 PM

One main problem in a case like this is because his wife is on the mortgage, he can not get additional monies to pay her off with without her permission (except for a complete payoff and refinance, like Jon suggested). And there is so much anamosity in these cases that one usually says "show me the money, then I'll sign". So you are usually stuck awaiting a judges order.

Best pass this one over until you have done a few deals.

Edited: 06/26/2010 at 12:33PM