I think i have a deal?.. Do I?

Question

Hello all,

Well I have been telling everyone about my want to get into real estate investing, and was reffered a friend who is 5 month behind on house. owes 293000 on first and 63000 on 2nd mtg. her payments are 3600 a month. She is really motivated to sell. house is worth 325000.

Can I make this happen

Please help

Wendell De Guzman · Answer

Chris Delacruz, you don't have a deal per se. However, as Jon Holdman said, you can make this into a deal through a shortsale.

You can get a discount on the first AND the second. You just have to ask. I can get the second mortgage to walk away for 5-10 cents on the dollar. And the 1st, can be discounted down to 80% if you know what you're doing. Hence, here's what will happen with a successful shortsale negotiation with the lenders:

1st Mortgage - $293K - shortsale down to $234K
2nd Mortgage - $63K - shortsale down to $6K
Total of Mortgage Pay off: $240K (75% of market value of $325K)

In addition to shortsale (which could take 3, 6 even 12 months), there is also a way to leverage on the foreclosure situation to generate cashflow from this house while you are negotiating the shortsale. But I need to know the details of their foreclosure (e.g., have they received the Summons to Foreclosure yet) for me to know what strategy is viable.

Ramon Jenkins · Answer

initial numbers do not work
$293k plus $63k equals $356k

He/She claims property worth $325k

I'll let expert weigh in on your thread, but I'm thinking shortsales
(more information most likely still need , fyi)

1st lien -  expert negotiate down from $293k   (mortgage lien / note)
2nd lien - expert negotiate down from $63k     (mortgage lien / note)

Jon Holdman · Answer

You would have to do a short sale.  In this case, that's complicated by the two lenders, especially with the first at least theoretically getting paid off in full.  Her best bet is to get it on the MLS and work a short sale with the second.

What are you trying to do with this?