Buying Subject To Existing Mortgage

[James Andrews]

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I had gone to meet with a real estate agent this morning who is representing the owner of the property I am interested in purchasing Subject To. The house was purchased for $115k in 2013, but the fair market value today is 80k with a balance of 95k remaining on the mortgage. I had spoken briefly with the agent before going to see the property, and he informed me that the owner owes the mortgage company approx. 5k in mortgage payments. I asked the agent if the owner owes the mortgage company 5k in mortgage payments then why should I give her 25k to do this deal? He then explained to me that the 25k is so that the owner can get caught up on the mortgage payments, closing costs etc…Now I am a newbie in the game of real estate investing, but for some reason it just didn’t sound right to my giving the owner 25k to cure the loan on my behalf then pay the mortgage company each month after I receive the deed. After asking the agent if he could email me a copy of the Authorization Release Form which he stated he submitted before I called on the ad, I felt that he became a little uncomfortable. He asked if I could stand near by while he call the mortgage company to answer any questions I may have regarding the mortgage. As far as I know, it could be a business acquaintance acting as a representative of the mortgage company.

(All replies would me very much appreciated.)

Below is how the property is listed:

FOR SALE 25K

Property is being offered SUBJECT TO EXISTING MORTGAGE. Balance is about 95,000 dollars, monthly payment is 755 dollars including principal, interest, taxes and insurance. Fourth bedroom is an extra first floor room between the living room and dining room. First floor has an enclosed porch, living room, fourth bedroom, dining room, eat-in kitchen, and powder room. Second floor has three bedrooms and a full bath. Basement has a laundry room. Property was newly renovated about three years ago and has central air conditioning. Fenced rear yard. This is a great deal for an investor. Section 8 (HUD) pays more than $1500/month rental!