Hello - I been working this lead for few months now. Here are the numbers...
Member is 10K behind on payments and owes about 83K left on home. The house needs 15K in repairs but it is liveable. The ARV of home is 150K. The member has not received LOD yet but is fearing she will receive it soon. She originally wanted 125K for home but now says she wants atleast 15K on top of what is needing to get loan caught up etc. I talked to my partner on this and he said most we can do is offer 5K moving cost and subject to the property to another investor. What are your thoughts on this deal? How would you handle it?
There are several ways to deal with this... First I would remind the homeowner if she goes to foreclosure, she will get nothing, 0, zip, zilch.
Right now 83+10+15=108K as a fix flip you shouldn't do more that 70% of ARV, which in this case is 105K, you are there with arrears, balance and repairs.
I would hold the line on giving her her loan balance plus arrears. If you want to, you can offer to pay her security deposit and a couple months rent to get her started.
Another option, do a Lease Purchase and take over payments and offer to split any profits over and above expenses. You could also assign the lease for a fee, and give her some of that.
Whatever you decide, it needs to be done quickly if the LOD is on it's way.
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