Preforeclosure contracted Sub2-Is this a deal?

Question

Hello BP. Well after a dedicated year I have a deal! Please help, any insight to the validity of deal would be much appreciated.

Subject to existing financing.

Cure of back payments:  $30,523.54

Closing Cost : 600 (or less)

Outstanding Principle Balance: $ 237,355.83

Original Principle Balance: $245,113.00

Mortgage (PITI) $ 1175.89

Rentometer estimate: $1695-1700

Interest Rate: 2%

Type: VA 30 Yr Fixed

Rehab Cost : $7.5k-10k

( Realtor Comps)

Listing Price between $339,900 and $425,000

4 Bedrooms

4 Total Bathrooms

2,887 to 4,300 Square Feet

$92.92 to $124.66 per Square Foot

Account Closed · Answer

@ BillGulley

Can you further share what you see that makes it a potential deal please.

Account Closed · Answer

@Wayne Brooks

You are correct, the 2% is a mod and will adjust to 3.25%

I need to update my profile as it says wholesaler. I am able to afford payments if loan is called due or accelerated and am a real buyer.

Seller is not looking to use entitlement again as spouse has passed and she is a civilian.

William Hochstedler · Answer

James J.

Why is there a range on the square footage?  How do you hope to add 1400sf for under $10K?

This looks pretty compelling if your market values are correct.

Bill Gulley · Answer

First, are you buying or wholesaling, if you're wholesaling you don't have any deal messing in a pre-foreclosure. If you don't have the money, thinking some buyer will come up with it and depending on your approach with the owner, you could end up going to jail messing in a pre-foreclosure. As a wholesaler, you're in very deep waters, way over your head.

As a real buyer, you may assume a VA, as Christopher described, the seller may not use that amount from that entitlement but may still have entitlements remaining that can be used depending on their time in service. The issue for the seller is they have been given notice, so for the next 3 years the entitlement remaining is probably worthless anyway, the entitlement is a loan guarantee not a right to qualify for a mortgage.

If you're the real buyer, you may have a deal, good luck :)

Christopher Phillips · Answer

Do you have VA entitlement? If you don't, the seller's entitlement would still remain attached to the loan and they won't be able to use it again.

Wayne Brooks · Answer

A 2% interest rate is a loan mod, which is a temporary rate, and will reset at some point.