where my savy investors ......need your help

[Josue Rivera]

 I have a person that wants out of his mortgage/house and is willing to sell based on the area and the condition of the house i would offer him between 85k to 100k max and buy as is. the tricky part is the guy has a mortgage on the house and he still owes 150k on it ..... is there anything i can do for him? what offer can you extend to him at this point i know the area and this would make a good rental if bought for the right price.... please help

[Jonathan Taylor Smith]

Hmmm, @Josue Rivera - That's a large spread from what you're offering to what is owed on the mortgage. A Short Sale may be the most conventional route here, but I've handled situations like this before via Lease-Option. Admittedly the spread from what was owed and what I offered was not as big, but I entered a 2-Year Lease-Option where I handled all needed repairs to make rental ready out of my pocket. I gave some amount of cash in hand to the seller in the form of an Option Fee. And then I rented the property to a tenant of my choosing while taking over direct payment of the seller's mortgage. The Lease-Option Contract gets recorded with the City / County Register of Deeds Office, and it gets attached to the title, so the property cannot be sold out from under me.

In my cases, by the end of the Lease-Option period, the mortgage was no longer upside down, so the seller got more cash at closing of the purchase. But with a spread that large, it would likely take many more than 2 or 3 years to cover, so it takes me back to Short Sale.