Hey Bigger pockets family were having a current issue where the current loan balance is 207,000 plus has a year of taxes and water bill . The total the seller owes is $220,000

Our goal is to sell the property to an end retail buyer for 220,000? How can we get the loan balance reduced with the bank ?

Any advice on negotiating loan balances with the bank ? We would like to get the bank to reduce by 20,000 or more the better .

Why would the bank do that, what value does it bring them? If you know the value is 220, it's likely the banks does as well...

Originally posted by @Anthony Kondor :

Hey Bigger pockets family were having a current issue where the current loan balance is 207,000 plus has a year of taxes and water bill . The total the seller owes is $220,000

Our goal is to sell the property to an end retail buyer for 220,000? How can we get the loan balance reduced with the bank ?

Any advice on negotiating loan balances with the bank ? We would like to get the bank to reduce by 20,000 or more the better .

Back in like 2010 lenders were handing out loan mods like it was cool because default rates were so high. It was a valid loss mitigation strategy at the time.

Q4 2018 ended with default rates at all-time lows, it'll be tough to make this happen.

@Chris Mason ok great point!

@Anthony Kondor

if you can pull it off write a book on it.

The only way we got an out of state bank to back off was to take pics of the roof leaks etc etc. It worked but they had held it vacant for 5 years before giving up.

@Matt K. @Chris Mason

Thank you for replying. I am Anthony's partner on the deal. To add more detail- our client (seller) has a loan modification in place and has missed his last couple of payments. Do you think the loan mod plus missed pymts will entice the bank to negotiate?

Chardae

Originally posted by @Chardae Jones :

@Matt K. @Chris Mason

Thank you for replying. I am Anthony's partner on the deal. To add more detail- our client (seller) has a loan modification in place and has missed his last couple of payments. Do you think the loan mod plus missed pymts will entice the bank to negotiate?

Chardae

Why wouldn't the bank just go through the foreclosure process and then list the property either auction or mls at the 220 vs knocking off 20k now?

I'm not that well versed in loan mods etc... But I'd imagine there needs to be some value to back up your reduction for it to be accepted. I'd also guess that this value will be tied to actual condition of the property vs saving the bank an adminstrative burden/quick closing...

And if the condition is bad enough to knock 20k off, it'd probably impact the appraisal your retial buyer will likely need...

Where is the motivation from the bank to sell to you?

If the loan is in default, it's in their best interest to put it on the market and create a bid situation as either a foreclosure or a short sale.

Also, it's hard for banks to sell to individuals off market because it shows favoritism (it is favoritism) so to reduce liability/impartiality and increase transparency banks almost always go through a 3rd party broker. 

Your Only shot is a full short sale...

Originally posted by @Chardae Jones :

@Matt K. @Chris Mason

Thank you for replying. I am Anthony's partner on the deal. To add more detail- our client (seller) has a loan modification in place and has missed his last couple of payments. Do you think the loan mod plus missed pymts will entice the bank to negotiate?

Chardae

 Like the other poster said, I think short sale may be your only route. The rule of "fool me once, shame on you... fool me twice, shame on me" applies here. He already got the one-in-a-hundred loan mod, and blew it, in the bank's eyes. 

Thank you All! Great information. All investors/atty we spoke with said same thing.....Short Sale.

My next question is...how would we start the short sale process and if so, how do we wholesale it?

Originally posted by @Chardae Jones :

Thank you All! Great information. All investors/atty we spoke with said same thing.....Short Sale.

My next question is...how would we start the short sale process and if so, how do we wholesale it?

 why waste your time and effort on this... spend that finding a better property to wholesale. No need to force a deal to work when there's plenty other options out there (if you can find them).

@Matt K. understood and agree. Thank you