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Updated about 14 years ago on . Most recent reply

User Stats

20
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12
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Kevin Kim
  • Investor
  • Ft Collins, CO
12
Votes |
20
Posts

Loaning to cure a default. Need a 2nd set of eyes on this....

Kevin Kim
  • Investor
  • Ft Collins, CO
Posted

I'm going to loan a distressed homeowner 10k to cure his default. His current LTV is around 55% (1st and 2nd mtgs). I want to see if I'm on the right track....
1) I'm going to buy his home on a mirror wrap subject to the underlying mortgages plus the 10k new loan amount.
2) I will immediately sell the home back to him on a wrap equal to the existing loans, plus the 10k on a 12 month balloon. He is giving me $4000 down and I am charging him 10% apr on the 10k loan. His repayment schedule on the 10k is approx. $500/ mo. plus reselling the home with a 5k profit (back end). I wanted to avoid usery loan charges thus the profit on the back end.

We will be closing back to back with a title company using ILC's.
Am I on the right track?

Most Popular Reply

User Stats

415
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484
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Paul B.
  • Real Estate Investor
  • Alpharetta, GA
484
Votes |
415
Posts
Paul B.
  • Real Estate Investor
  • Alpharetta, GA
Replied

I think I just experienced my first brainfreeze without drinking a Slurpee. I've never claimed to be the sharpest tool in the shed, but what are you trying to achieve here?

Why don't you just advance him the net $6K to cure his arrearage and have him deed you the property?

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