Strategy for Taking a Property Subject to HML

[Darius Ogloza]

This was inadvertently posted in the wholesaling section.  Re-posting here:

Any tips on how to go about negotiating the following potential deal would be greatly appreciated:

Out of town investors purchased a SFR property to rehab and sell in Sonoma County CA using a HML based in SoCal. Project went into foreclosure 3-4 months ago and currently stands about 60%-70% complete. Post foreclosure, the property was listed for the full amount of the HML loan ($1.2 million) with no takers over the course of several weeks. Currently, the property is listed for $1 million (an amount below the outstanding amount due). The property is especially tricky in many respects so we do not expect a lot of activity around it. Our local group has the resources to get the project completed and sold. We are thinking of offering $800K subject to the existing lender's financing 100% of the purchase price to stop the bleeding on the loan. We would complete repairs out of the pocket and cover the carrying costs. Any thoughts on the likelihood we will get a bite? Any additional terms/conditions you would advise?