Hi BP Mates!!
So, I've been education myself for quite some time, and I've put together a list of properties I will like to target to get my REI career started! I've been trying to put myself in a struggling homeowner's shoes in order to understand their logic (or non thereof) and maybe I can have an educated conversation with them (since we call ourselves problem solvers, right?)
For example: If I'm struggling to pay my HOA and they file a lien against me, yet I have 20-30 % equity...why wouldn't I take out that equity to pay the balance?
I'm assuming, the bank won't give me the positive equity to pay late mortgage payments, but would they do so in order to pay the lien against me?
I just want to understand when does a cash offer make sense to a homeowner who has positive equity?
Hope this is not a silly question but I do not want to start a conversation that I am not completely un-educated on.
Any feedback is appreciated.
I believe you are right that the bank is not going to approve a HELOC or refinance a mortgage if the current mortgage is behind. I refinanced a residential property years back and the first question the broker asked was if I had paid the mortgage on time over the past 24 months. In the example you provided, I think paying their total balance off and giving them a little money in their pocket (if possible) is the best way to approach it. The final offer will be determined by the ARV and the cost of repairs.