Rental Property Investor · Milwaukee/Madison, WI · Member since 2023 · 29 posts · 8 votes
Hey everyone,
I’m currently holding a duplex in Madison, WI that I’d like to move via Subject-To, and I’m looking for some advice from those of you who have done similar deals.
Here’s the quick overview of the situation:
3 bed / 1 bath lower | 2 bed / 1 bath upper
~2,277 sq ft | Built in 1946
I am currently ending the leases on both units so I can move it easier
Loan: 30-year FHA @ 5.75% with about 352 months remaining
Current balance around $389K
Monthly PITI + MI is roughly $2,936
Total expenses around $3,500/month
Rents bring in $3,600/month
It’s cash-flowing slightly and sitting in a stable rental area on Madison’s north side.
Would love any suggestions on ways to go about this
I feel compelled to be brutally honest with you: an experienced investors will see about -$0- equity, and no cash flow. With capex included, it's a negative.
Also, I'm unaware of FHA changing their underwriting requirements, so if you have not lived in one apartment in the property for a year or longer, you are in violation of FHA mortgage regulations. They have no sense of humor for what they consider mortgage fraud.
Further, when the assignee defaults on your mortgage, you will still be responsible.
Unless the market rent is way above what you are now receiving, IDK who your potential buyer would be. Perhaps an inexperienced person who will bolt as soon as they realize they have nothing but negative cash flow and they have no liability on the mortgage/note side.
Speak with your legal professional before doing this deal.