Do I have a viable Sub2 lead

[Scott Robinson]

Got a call from a family facing a foreclosure auction 6/7 that wants to sell.  They don't want to save the home, just their credit and make $4000 so they can move out of town.

They owe $126k, as is value of $140k, ARV of $160k. Payments are $1100 @ 5.5% for 30yrs. Loan re-instatement is $26k. Home is Arlington, TX near Randall Mill & Cooper for those interested.

My wife is a realtor and has a client looking for owner financing in the area so, I was thinking we buy it sub2 and then owner finance it to her client...

Thanks in advance for the advice.

[Steve Vaughan]

Whoa @Scott Robinson!  I like your creative thinking, but in general, we don't sub2 pre-foreclusures.  We like pretty low equity houses that are current!

The house is also upside down, unfortunately. $126k bal + $26k arrears = $152k. FMV as-is = $140k. You'll pay $26k to lose $12k on day 1. Plus the risks of them not moving out, oh and the $4k moving money. $16k down the crapper!

For the most part seller-financing to an owner-occ is risky as well with DF and the Safe Act.  I'd buy this from the bank after foreclosure, if at all.  Good luck and keep those creative juices flowing!