In the Middle of a Deal What To Do???

4 Replies

What's up guys? In need of some assistance. Ive had this property under contract since early December financing through Do Hard Money. The process was drawn out so long because of low evaluations, poor customer support etc. We have extended closing 4 TIMES! The only reason the property hasn't foreclosed is us having it under contract. I mistakenly turned in a high (safe) bid and now we have to bring $25k to close which we don't have and Do Hard Money will not allow us to remove items on the bid. The closing date on the extension is this Thursday! Trying to avoid these homeowners losing their home without any money in hand, what do you recommend we do?

Howdy

Have you thought about trying to do a Subject Too? Meaning buying their property subject to their mortgage staying in place. You would want to do the numbers and make sure it would cash flow. You'll need to factor in how much you'll need to bring to the table to bring their loan current and you most likely will need to put some repair money into it to get it rent ready (that's one of a few unknowns that would come into play). If the numbers work and the sellers are good with you taking it over and the bonus of knowing they won't have a foreclosure and instead they have a property that will help them rebuild their credit, then I would approach the bank and let them know what you're up to and quite often they will be good with it. Or you can run the gamble of not informing the bank and hoping they never exercise their due on sale clause. Even if they exercise the due on sale clause you would be given time before that comes about.

I've never seen a bank exercise the due on sale clause as long as the payments are being made.

There's a lot more to this, if the numbers work and the sellers are on board then let me know and I can help you with some of the details.

Good Luck!

I think for a sub to you would still need significant cash to bring the loan current.

First, make sure your numbers are spot on, with the 25k you’ll have to bring. It is sad these people are losing their home but the last thing you want is to end up in your own foreclosure.

If the numbers are good then and you literally have no cash and no way to get that cash, your only other option is a partner. Talk to every investor you know and see if some one will jump on board.

Hey Jalil, you could call up as many investors as you know and they may help out as @Jonathan Holmes suggests. Good to see you are still in the game. Keep moving forward and good luck!!!!

Originally posted by @Jonathan Holmes :

I think for a sub to you would still need significant cash to bring the loan current.

First, make sure your numbers are spot on, with the 25k you’ll have to bring. It is sad these people are losing their home but the last thing you want is to end up in your own foreclosure.

If the numbers are good then and you literally have no cash and no way to get that cash, your only other option is a partner. Talk to every investor you know and see if some one will jump on board.

 What he said. And then ask yourself why you're 2 days away from closing and only just figuring out you need to bring $25k to the table. You should have known that when you were applying for the loan. If you were hoodwinked by your lender, than they don't care if the loan falls through because they'll keep all the fees you already paid them. Any quality lender should be able to tell you what your closing costs will be except for maybe a few minor variable items based on the exact closing date (i.e. days of interest and your % of property taxes, etc.)

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