Sub 2 Deal

[Rich Tenor]

Currently have a Sub 2 Deal in Burford, GA 30 mins from Atlanta. Unfortunately deal does not have any equity or cash flowing. 

Direct to seller.

Purchase price 325,000

PITI 2,251.00

(Monthly payment Breakdown)

Principal and interest 1717.13

Taxes 191.87

Insurance 144.17

MIP 198.48

HOA 230.00

7-10 year Balloon

Interest rate 5.99

Reinstatement amount 33,093

[Randy Rodenhouse]

You left out some key info like current value (as-is).  They owe roughly $358,000 with arrears.  Also what would a house like that rent for in the area?  If there is no equity and no cash flow from the property then it is best to pass.  You my be able to buy sub2 and then sell with owner financing but the spread would be a bit thinner than I like since the underlying loan is at 6%.  You could however owner finance it at 9% and make the spread but is it worth coming out of pocket $33k to reinstate.