Purchasing A Property The Current Owner Is Upside Down In

[Brian Fiorillo]

Hey All,

A bit of a newbie here, but I came across a multifamily deal where the current investor is upside down in the mortgage. He purchased the property in 2004 for $95,000 and currently owes roughly $65,000. From a landlord perspective, he seems to have made several mistakes from not vetting his tenants and not requiring security deposits. Consequently, the place is trashed and will need substantial rehab. Based on the numbers I have run, the property is worth $40,000 at most in its current condition.

Has anyone ever worked out an agreement with an owner that owes more than the property is worth? It sounds like a longshot but if someone has a creative approach to these types of situations, I would love to hear it.

All the best,

Brian Fiorillo