Found a property people are past due on.

[Christopher Morales]

Hello Everyone,

I am not sure this is the right section to be posting this so it its not feel free to move it.

I found this property that i would like to purchase and the owners have not paid the mortgage in over a year and owe like $46k. The property (once 100% fixed up) is certainly worth more, from my research at very minimum $100k. It has new 200amp service, and new gas heater but needs a few more little things that i can take care of.

I met with the two owners the other day, they are going through a divorce so it was tough getting them in the same room. They are financially unable to keep the property and have not make a payment in over a year! I have not spoke to their mortgage service provider yet but i am wondering if anyone has ever done a deal like this or has any advice? I am going to meet with my local small community banks this week but was wondering if there is a way with dealing with the current finance company. I also know and understand that almost no small loans like this are assumable so i know that is not an option.

A little backround info about myself, i have been in real estate for 6 years and have done all kinds of deals but this is a first of its kind.

Thanks in advance everyone!

Chris

[Jon Holdman]

If your offer nets out to less than what they owe, its a short sale. That requires to lender to accept a short sale and may have tax and credit consequences for the seller. If you make an offer that nets out enough for them to pay the full amount, then no short, no approvals, no credit hit, no tax problems.

But you say its listed for just more than what they owe, yet you say its worth $100k or more when repaired. How much work is needed.

Your refi to "pull equity out" is a cash out refi. Plan on waiting at least a year to do this. Otherwise the lender will you what you paid, and maybe what you you can document on rehab. If you want to use a new appraisal for a cash out refi, you should just plan on holding for a year first.