Seller has been through a bankruptcy

2 Replies

I am working with an off-market deal. The seller has a mortgage $180,000 and he has $18,000 in arrears. He already had a bankruptcy. The retail value is worth around $230,000. The seller wants to sell with $10,000 in his pocket. I want to explore subject-2 and have never done one before. My goal would be purchasing and renting out for around $1,700 a month (not 1%) or wholesale to one of our investor buyer. I have a few newbie questions:

1. The bankruptcy attorney advised the seller if the offer amount is lower than how much the seller owes, he should just go to another bankruptcy again and live couple more months "rent free". Is that even a good advice? The client has "nothing to lose" since he has already had a bankruptcy.
2. When I called the attorney for information about how much is owe the attorney was not willing to share. What is the best way to find out? My plan is to ask for the loan numbers and provide that to title to pull this information.
3. Is there any escrow around Seattle that can close on a subject-2? Also do I need a special sub-2 contracts or a addendum will do?
4. My attorney or escrow wouldn't do these types of transaction. Is it even legal in WA? Also I have a realtor license would it prevent me from getting into this type of transaction?
5. What protection does the seller has if we don't pay the mortgage? What security can we offer the seller?

Thanks everyone!

Only the lender can tell you (they'll only talk to the borrower unless you have the proper authorization forms executed by the borrower) the outstanding balance, and amounts to bring current.  The seller no longer has any liability on the mortgage, assuming it was included in the BK, so he couldn't BK it agin to stall a foreclosure.

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