Updated over 9 years ago on . Most recent reply
Do I have a viable Sub2 lead
Got a call from a family facing a foreclosure auction 6/7 that wants to sell. They don't want to save the home, just their credit and make $4000 so they can move out of town.
They owe $126k, as is value of $140k, ARV of $160k. Payments are $1100 @ 5.5% for 30yrs. Loan re-instatement is $26k. Home is Arlington, TX near Randall Mill & Cooper for those interested.
My wife is a realtor and has a client looking for owner financing in the area so, I was thinking we buy it sub2 and then owner finance it to her client...
Thanks in advance for the advice.
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#1 Personal Finance Contributor
- Rental Property Investor
- East Wenatchee, WA
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#1 Personal Finance Contributor
- Rental Property Investor
- East Wenatchee, WA
Whoa @Scott Robinson! I like your creative thinking, but in general, we don't sub2 pre-foreclusures. We like pretty low equity houses that are current!
The house is also upside down, unfortunately. $126k bal + $26k arrears = $152k. FMV as-is = $140k. You'll pay $26k to lose $12k on day 1. Plus the risks of them not moving out, oh and the $4k moving money. $16k down the crapper!
For the most part seller-financing to an owner-occ is risky as well with DF and the Safe Act. I'd buy this from the bank after foreclosure, if at all. Good luck and keep those creative juices flowing!