1st DM campaign, I have a lead, but unsure because of loan mod?
Hi BP! I've been a wallflower on BP for a few months and I finally built up the courage to do my first DM campaign. I have a lead now that didn't ask me to take me off my mailing list. I'll try to be as detailed as possible. I sent 450 handwritten envelopes with a typed letter inside (handwritten font) to people with tax suits or tax judgements in Houston TX where I live. I also mailed out 750 letters with handwritten font on the inside letter but handwritten on the envelope for people with loan modification. It arrived Wednesday.
Now the lead I have is 1260 sq ft sfr home 5100 sq foot lot from my loan mod list
2007 built
3/2
The arv is 135k for actual sold comps. The DOM are about 34 days the rental rates are about 1350. Its in Humble TX. Open concept, with no carpet all wood.
I have yet to visit the property I will go tomorrow at lunch, my first home visit.
I pulled some paperwork on the home and I see that they are the first owner, and the original principle amount is $116,166. They have unpaid principle in the amount of $104,053.97. Now this is where i'm completely lost.... After they did the loan modification they have a new principle amount of $84,103.47 with an interest rate of 4.25% They have a "total partial claim due of $24,063 which includes the $19,525.31 that has been reduced from the unpaid principle balance to reach the new principle balance " His new mortgage is $413.74 (principle and interest payment) and on top of that he has a monthly escrow payment of $436.03 for a total of $849.77.
I understand the $413.74 but I don't understand the $436.03 can someone explain this?
How come the loan modification company which is Wells Fargo give the motivated seller about 20k in instant equity? Can someone explain this math to me please. If the ARV is 135k am I right that he has about 50k equity? But how is that possible if his loan just started new and over?
Also what can I do to this property? I was thinking of maybe wholesaling it? Considering the 70% rule and minimal repairs If I can get it for the unpaid balance or a little more than that. I just want to do my first deal the amount I get is not a priority. Or maybe if he wants more than I can wholesale it to a buy and hold investor. I was also thinking of doing a wholesale lease option if he wants more than that. I was also thinking of a subject to ? Are all those strategies possible in this case? I'd love any advice on how to do this deal.
The owner of the house is very tight lipped about how much he wants, he might be just a tire kicker, but I am pursuing it still because I need the experience. He doesn't know I pulled the loan modification paper work. The owner claims he doesn't know how much his house is worth and ask me to make an offer, but I learned here that whoever talks price first loses, so I will keep that in mind tomorrow when I go see the house. Sorry for the long post