All Forum Posts by: Kevin Yeats

Brandon recently posted this blog article

http://www.biggerpockets.com/renewsblog/2015/05/26...

This is a good place to read up on eviction laws ... with links to the laws/procedures in each state

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As a CYA, this is NOT LEGAL ADVICE

Have these owner missed payments in the past?

From a lender's perspective, these owners want the lender to take a loss while the owners move to another home ... and make payments on the other home (lot and construction costs).  Why would a lender lose $20 K (or so) while these homeowner can make payments on two properties?

What is their income and what are the payments on BOTH properties?

 I don't understand you comment.

Partnerships can be established as long as both partners agree to the terms ahead of time.  Two partner could pool their available cash and buy a property WITH NO LOAN and split the profits 50/50 and no preferred coupon on any loan.  That would be cheaper than Hard Money.

IMO, it really is the "skin in the game" requirement.  Lenders want to lend money ... they really don't want to foreclose on a property and then either sell it (probably for less than the loan balance if they financed 100%) or fix it and flip it.

If the HM borrower walk away the day (or week) after securing a HM loan, they really have not lost anything.  The HM lender loses a  lot.

You could give these borrowers some money.  That would really help them

Bu more seriously and realistically, they either need to find a lender willing to refi both mortgages into a single first mortgage or they need to find a way to generate more income from their business.

Truly, they bought too much home and their income dropped as did the value of their house .... but their debt did not drop.  Such is the nature of debt.  They risked their home when they used it as collateral, in essence, for a business loan.  It didn't create more value and thus their home is at risk.

Bottom line, refi if possible and/or work harder to generate more income.

Matt, You don't explicitly state that the owner needs/wants to sell the house but I presume so.

Taking the numbers you state as accurate.  From the second note holder's perspective, they could take out the first noteholder for $125K (perhaps less) and then foreclose on both notes and get the house (value of $400K) for only $125K.  If second holder then sold this $400,000 property at a 10% discount, the property would sell for $360,000.   Netting out closing costs and the second note holder comes close to breaking even.

If you think you can get this house for $100,000 (ish), that would require a LOT of debt reduction by both the first and second note holders .... probably something that they won't do.  Basically, do you want both first and second noteholders to allow a short sale?

Read Eric Drenckhahn's landlord blog .... No  Eric is a member of this BP community

@Patrick L.

How much of a discount is enough to "buy it cheap enough" when there is a great uncertainty as to how long it will take to evict the squatter, how much money that eviction will take and how much damage the squatter will do before eventually vacating the property?  All large uncertains.  It could happen tomorrow or it could happen a year from now.

See Will Barnard's The Occupant from Hell thread.  4 years and Will still has not stepped inside the house he bought ... yet Will has had to pay taxes, insurance and interest on the loan he incurred to purchase the property.

From reading various thread here on BP, I have arrived at the conclusion of buying a house with and occupant, especially an occupant without a lease with an expiration date is simply buying someone else's (the seller's) problem.

While not universal, I have read lots of threads where someone buy's a house and can't get rid of the current occupant, be it the prior owner, as in this example, or a prior tenant who overstayed the lease.

My conclusion, let the seller get rid of the occupant and provide the buyer with an unoccupied home with clean title.

My $0.02

... and my apologies ... It's Eric Drenckhahn.