I got a call today from one of my bandit signs. Here are the #'s. Tell me what you would do please. I'm a newbie and feeling overwelmed and scared:
Owner is in preforeclosure and 5 payments behind. She has about 15 days to the auction.
Estimated home value (unverified): $400k
Mortgage amount: $349k. It's a 5-year ARM that is fixed for 3 more years.
Arrears: about $10k
Monthly PITI: $2,371
Avg. rents in the area: $1800-2000
Willing to sell for what she owes.
Relatively new SFH, 5BR,3.5BA needing know work at all. In great shape.
Please help. I don't think there's enough equity here to do much since I can't do a cash deal, and the rents won't cover the mortgage payments. Please advise.
Looks like a short sale is the only way to make this work for you.
Just my opinion with the data provided.
Agree. There's no deal at all at "what she owes". That's probably not really what she owes, if she's five payments behind. You need a serious short sale, something like $300K. Get her to agree to that figure, then start working it with the bank. As far as she's concerned, there's no difference between $450K and $300K. She gets nothing either way.
There is no equity here at all. If you owe $450K on a property worth $500K, after closing costs and paying off the loan, you'll get nothing.
Thanks to both of you for your views. That's what I was starting to realize. Short sale would be the only option. I've never done a short sale before, so perhaps I could wholesale such a deal or birddog to a more experienced investor.
I'm quickly learning that I have to keep my emotions out of it. I feel badly for the woman and I want to help her, but outside of a short sale, which I've never done, there's not much I can do.