Can I wholesale an apartment if its underwater in mortgage?

Question

Hi everyone, I'm new to BP but always reading posts to get answers and I'm wondering if I can wholesale an apartment (quadplex) if its underwater. The owner says the mortgage would be their problem so I'm assuming they are going to bring money to the table to pay off mortgage (still have to ask if they're willing to pay off rest of the mortgage). She sounds very motivated to sell, she took the first offer and ask if I'm willing to buy more.

Russell Brazil · Answer

If the seller is bringing money to the table to pay off the lender, then you should be able to. If they re not, it seems like it would be a pretty hard property to wholesale, since you would then need to find a buyer willing to assume a mortgage that is worth more than the properties value, and would need the bank to allow the mortgage to be assumed.

Breon Smith · Answer

its not cash flow positive with the mortgage, only becomes cash flow positive when its free and clear she wants to sell 3 and a friend has 1 for a total of 4 quadplex on the same street.

Breon Smith · Answer

Exactly what I've been thinking also, she has 3 quadplex ( 2 vacant, 1 occupied) the occupied brings in $1,980 total thats without the fees and the mortgage is $1,800 so when you minus the fees she's coming out the pocket to pay the mortgage. I'm always trying to help someone when it may be no way to help. Thanks for the advice

David Dachtera · Answer

@Breon Smith,

Exactly. What you pay plus what she brings pays off the mortgage? Why does she not pay it now and avoid the short-sale discussion?

Something's not right here.

Breon Smith · Answer

ok thanks, I'll talk to her monday, it seems like she's beating around the bush when I ask about the mortgage and how it will be paid off, she keep suggesting it will be her problem, so I'm assuming she will pay the remaining balance, as if she wants to minimize what she has to pay off the loan by taking our offer and putting the rest with it to pay off the loan. If thats not the situation then I will walk unless their are other creative ways to get the deal done. thanks

David Dachtera · Answer

@Breon Smith,

I guess my question would be that if she can handle the mortgage situation why doesn't she?

The only other - legitimate - option would be a short sale, and she probably thinks - in error - that she can keep that off her credit profile somehow.

I'd talk to her about a short-sale and if she balks, walk away.

Breon Smith · Answer

ok thanks, I'm assuming she is willing to bring money to the table, she keeps on telling me to not worry about the mortgage it will be her problem, she also wants me to buy 2 more from her.

Can I wholesale an apartment if its underwater in mortgage?

Can I wholesale an apartment if its underwater in mortgage?

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