A wholesaler called me this week. He had a deed for sale, where the owner of a 2F is being foreclosed on. The ARV is 435K, the bank is owed 300K, but would short sale for 180K. The house needs 40k in repairs. The woman wanted 10K to sell the deed. She has no interest in doing the short sale. She just want 10K and she'll disappear, But she will sign a power of attorney. The wholesaler is looking for 5K.
I past on the deal. I thought there may be something unethical about this. I also, couldn't figure out how to make this deal work.
Another, local investor looked at the deal and ask the wholesaler for the mortgage statement. The other investor immediately jump on the deal. This other investor is a fairly ethical man. Hes about 60 years old and has a lot of experience.
What does he know??
The other investor could be doing a "subject-to" whereby he will get the payments caught up if the woman is facing foreclosure, then keep the payments current. The mortgage will still be in her name but the title will be in his. He may then spend the money to fix up the units and then refinance into his own name.
Or, he could just buy the property for the amount owed the bank + $10k. It sounds like the woman considers the building a "headache" whereas others see it as "opportunity".
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