Options to buy for less than someone owes on a property

3 Replies

I have an off market deal I am looking at where the price I would like to offer is around 8-10K less than what the seller currently owes. I brought up the idea of purchasing subject to his existing mortgage from the realtor who is representing him, but they asked how would we report that at the closing table. So I am not sure if I can purchase this property subject to if there is already a realtor in place, or can I just pay them the commission outside the sale and not have an actual closing? The realtor has not listed this property on the MLS. Seller seems very motivated per discussion and is willing to just walk away from the property and let the bank foreclose. My all in price with rehab would be around 50K-55K, ARV is around 74K, and the rent is 800. My plan is to hold as a rental. Any ideas on how to make this work other than the seller bringing 8K to closing?

Your only option is a short sale, which the bank is not going to hand you on a silver platter. They're going to insist that it be listed by a third party.

As far as your other question you can do a normal closing but with an exception keeping the mortgage lien in place. I'm not a lawyer so that's all I've got there.

Thanks @Sam B. , The person could not find a loan to bring money to close, so the realtor is going to list the property on the MLS and see if they get any takers. The property will probably go to foreclosure at some point since he is no longer paying the mortgage. The realtor did not think it would be worth the commission to try the short sale option.

Being all in for 65K would still be on okay deal for my first - projecting $200 cash flow and a 9% ROI and leaving 20-25K in the deal after refinance. However, I wanted to shoot for 12% ROI and not leaving quite so much in the deal.