I have come across a subject deal. They are asking $15K + Subject Deal ($58K + $310 per month interest). I am trying to finance via Hard money and around $30K-$40K in rehab. Do I add the $15K to $30K-$40K rehab as an all in at $55K and pay the existing mortgage on the home? Or do I buy out the owner and include the left over debt and rehabs at an all in $113K?
I am just confused and would like some guidance. I have a lender lined up for a Fix and Flip loan but I am not sure if something like this would qualify or benefit me.
I would love to cover the existing mortgage and then have my hard money lender loan be $55K. Then refinance and BRRRR this great property. Is that possible?
Here is the description - "This is a 2 unit duplex. Property is being sold as a subject to deal- take over the mortgage payment on this property with no bank approvals. Property was getting 1200 for each unit. Inquire for more details on mortgage and assignment fees." Subject to Info: Mortgage principal owed: $58,000 Principal and interest per month: $310
Most hard money lenders will only lend in 1st. The only way to keep the existing 1st is to find a private lender/partner that will take a 2nd. An IRA with 60K to invest could be your lender. IRA's don't "need" cash flow. An accruing loan would be nice to give you time to fix up, rent it, and refi or resale.
These numbers look really good. About 120k all in for 2400 a month in gross income doesn't need to be put in a calculator to see if it will make sense.
Watch out for the "balance due on Sale Clause" in those Subject to deals
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