Creating Equity by Negotiating 2nd Mortgage Reduction

[Chris Licavoli]

Hello -

Noobie to this thread and BP. I had a motivated seller contact me with the following details:

- Tired landlord wants out 1250 sq ft 3/2 house built 1991 good shape house
- probably rents for about 1000 a month
- 1st mortgage $69500 payments $766 current
- 2nd mortgage $27000 payments $289 2 months behind
- Est market price $115K but will sell for what he owes

The only way I would be interested in this is if I could get the second mortage holder to accept a payoff of a couple thousand only on the debt but I have no experience in pulling something like this off. I guess the only way they would is if they thought that the first mortgagee was about to foreclose but I have no idea how to put myself in the middle of a deal like this. Does anybody have any advice?

Thanks in advance
Chris

[William D.]

Good idea. Bad set of facts. It doesn't matter what your offer price is, the lender will do its own valuation. If they see they are 100% secured it is unlikely they will take a short payoff resulting in a few thousand bucks. The foreclosure angle is interesting but even there the second has a chance to gain from surplus funds at the auction or make their own bid.