foreclosure rescue (buy, rent, & sell back)
Hello, i'd appreciate your suggestions as to whether this is a deal or not. Please let me know what I am missing.
A widow of 2 years has been 6 months late on her Bank of America mortgage. I have an assignment contract with her on the 3/2 1695 ft home in Grand prairie, TX valued at ARV $130k. The house was build in 1969. I've offered to pay off the $28k remaining loan. In exchange for me taking title to the home, I'll be giving her a $27k cash cushion to pay off bills. After 30 days she will be paying me $650 rent for 10 months. Then at this time she expects to take an early retirement and lump sum pension of $200k. This will enable her to buyback the house from me. She does have three step sons who have signed an Affidavit of Heirship. She has told me they are willing to release their claim on their 50% stake of home for $1.5k each.
- My Purchase price: $55k
- Rental income 10 months x $650/month = $6.5k
- 2015 Taxes $2,254
- Insurance :$1,500
- I sell back to her for $66.5k
- Profit: $18k
- Net Profit: $14k
Is this a good deal or too risky? Will the title company search for all liens/claims? What am i missing? Is this legal? Should I structure as a secured promissory note instead?
I appreciate your input!