Subject 2 deal in Houston TX. Need a way to make this work.

[Geoffrey Jones]

I have a another beautiful home under contract for a Sub To Agreement. My Purchase price is the remainder of the mortgage. The house is only 8 months old. Needs no repairs. Mortgage + Insurance payments are $930 month. Rental for this unit is 1400 - 1500. Owner moved to another state 8 months after buying it. Why?  Homeowner lost his job after a few months and missed his payment in August.  He claims he made the payment to the bank for August, but then missed the payment for September. He wanted to live near family so moved back to his hometown. Home is now in distress.

He called his bank and negotiated a payment arrangement in September and spread his September payment through October, November and December. 

We are now at the title company ready to close at the end of the month. Bad timing? Yes! Cause the mortgage payment is again due on the 1st of the month and when ordering a final payoff amount from the bank they now see that the property is $1800 in arrears. Owner is claiming he made the payment  in August but it takes time for it to show up at his lender. 

I need help from my buddies here on BP. What should I do here? 

1. Part of me wants to be a good Samaritan and pay the remaining balance.

2. The Money maker in me tells me to make sure he pays up what he owes so I can get closer to a no money down deal.

I don't want this to threaten the deal as I know this will help him out and prevent him from defaulting and also I will gain access to a very nice property with 400 - 500 income potential a month.

So lets hear it fellas who should I listen to . The good Samaritan or the money maker. If you have some advice in between please share it.

[Brianna H.]

Originally posted by @Geoffrey Jones:

Here's the financials

ARV $160000+ I assume property values will increase over the next 1-2 years
Current Loan 142,000  Amortorized over 30 years @ 3.2%
Repairs $0
Mortgage & Insurance 930/month

I planed to cancel the existing insurance and put my own in place at a much cheaper price. It will bring my mortgage payments down to 800/Month

Taxes 580/Year

Cash flow opportunities

Potential Rent 1500
Potential Lease Option 1700 + 15000 down with $200 option money

 I can't wrap my mind around taxes on a $160k house being $600/year. That's 0.4%. I am assuming that since this is a new house, taxes are just on the land and you are in for a rude awakening next year. Just my two cents. This doesn't seem like a good deal at all.

Just FYI...taxes in Texas, from my experience, are typically around 2.5%. This would be about $350/month.