I am new to this site and this is my first question. My father currently has a single family property that he is giving to me to start my dive into realestate investing, However the property is about to go into foreclosure. The loan originated with Chase, who recently sold it to Seterus, who is now about to start the foreclosure proceedings.
The mortgage is $600 a month at %2 and the past due is close to $4,000. My plan is to get a hard money loan for $30,000 to do small renovations about $2500 and rent it out and take the remainder to purchase another property to flip.
The few issues I have is I'm not sure of the equity in the property. There are home in the neighborhood that have recently sold for 125 - 150 but there are also foreclosure that have sold for 35.
I look forward to some suggestions
What is the balance on the property? What is the current value?
Could it be rented out? You should only rent it out if you can bring the loan current.
If it is underwater, a short-sale to a 3rd party is probably the best option. The bank would be unlikely to sell to you(or at least not at a discount) - since your are a family member.
Thanks for the response, Yes it can be rented out. which is what I plan to do, and the balance is 120
Don't take this the wrong way....
But your father isn't doing you any favors by "giving" you this property. It is, on the surface, a zero equity deal.
I think you have to ask yourself a question: Are you doing this deal because it's a GREAT deal, or are you doing this deal because you want to help your father out?
I think there is a ton of value in trying to help family. But if you are being charitable with your business, you won't have a business long-term.
Find a property that is a screaming hot deal.
Thanks, after thinking about this some more and reading the responses, I believe you are right. My eagerness to get started has made me a little impatient, I'm going to pass on it and help him short sell it.
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