All Forum Posts by: Curtis H.

Hi guys, 

I have a post one page back with all the boring details on this Sub2 opportunity. Seller is willing to deal, and I think I have a 85% shot at getting it. Here are my questions...

1) Can the bank NOT let me bring the loan current and still send to auction? Or if I bring the loan current the only thing left for them to do is possibly call the loan due? This home is scheduled to go to auction in about a week. I plan to get it under contract tomorrow with a 5 day inspection/due diligence contingency. 

2) Realtor is trying to double dip on commission. I don't have a buyer's agent and he is trying to get 6% on a $450K sale and leave the owners with nothing. My thought is he gets 3% (I am paying his commission) and he'll like it. Will there be a problem with this? 

3) I give him the $100 earnest money when we sign the contracts? Or that goes to escrow? Then I find a title company and schedule the closing?

Hey all!

@Brian Gibbons @Joe Villeneuve @Nick Wing 

Thanks for the feedback. Sorry I stepped away for a bit...

So things are progressing, but the plan has changed to me living in it and taking over Sub2 after paying back payments. I will renovate the house when I get enough money to do so, and either sell it and upgrade or stay there if I like it.

So here are some things I need help with fast...

What is my answer when they ask "what happens if you stop making payments?" "How do I know you are making the payments"? 

Also, besides helping their credit, are there any other benefits to Sub2 for the owners walking away?

Brian or anyone else, if you know a good real estate attorney who can draw up a contract for Sub2 please send them my way. If you guys have contracts you have used and know works, I'll take those too!

This deal could be going down tomorrow and I want to act fast. 

Lastly, it's ok for me to negotiate a lien with Unemployment and the back payments with the bank right? Or should I not be drawing attention to the fact I'm taking over the loan?

Help!!!

@Joe Villeneuve 

Very good questions, and yes the price is true. I can't believe it myself. 

My exit strategy is to live in it for a couple years and then sell, or simply get it under contract and flip it to an experienced rehabber in the area. 

Money wise I would do a FHA 203K Rehab, 3.5% down. Lot of red tape but about as cheap as money can get in this scenario.

Seller's lien holder is the bank, so I would imagine if I could write them a check for the back payments and they are likely to reinstate the loan? Do banks actually tell people they CAN'T reinstate the loan before an auction in a couple weeks?

Home listed for $500K (Total beater in great area)

On market for over a month so clearly they aren't getting near that number

2/1 900sf

Needs complete gut job and possible addition of bathroom and bedroom on same level

Socal remodel prices for a newbie ($175-200sf)

ARV after the rehab $575K

Scheduled to be SOLD at auction 9/2, $387K owed on the house, $32K behind on payments

What would you offer and how would you structure it? I was thinking bring the loan current and take over sub2 or do lease option and offer to pay agent commission...or just flat out offer what's owed plus agent commission, and use a 203K to do the repairs and not pay out of pocket.

If I take over Sub2 in CA, will that keep the taxes the same? Because they are really low :-)

Thanks!

Curtis

Has anyone ever done this? Bought a lot amongst other homes at a steep discount and built a home there? I live in Socal (the valley) and prices are out of this world right now. Besides, I don't want to live on a regular city street. I've always wanted SPACE. Regular sized house, huge lot in a niche community (rich, retirement, horse, etc) to help resale value later. 

So something like this...not this at all, but close enough. 

http://www.redfin.com/CA/Pasadena/0-SHAW-RANCH-Rd-...

If this land is right next to other homes, it probably has easy access to water, sewage, and utilities. Not a given, but probably. So my questions are...

1) Who would I hire/use so I won't be doing this blindly? To let me know this land is ok to build on? Land broker? The general contractor who would build? 

2) Is this a bad idea? I feel like screw that, if I can get .25 acre and build a modest home for the same money, why not? Especially in an appreciating neighborhood. 

Would love to hear from fellow Socal resident @karen margrave has to say on this one too. If I don't get into something by next summer, I feel I will be priced right out of this place and renting for life.

@Elizabeth Colegrove

It's a tough call. I'm looking at the other homes that were sold or pending for $125K range and there were a couple that although they were 

single story and 300-500 sq ft smaller

did not have the same curb appeal....

They WERE practically rental ready. These were homes on the MLS, not wholesale deals from investors. So the deals are out there, but I don't have the time to find them and I know that. My gut tells me that this opportunity is about $10K too high though.

And then there is the issue with a home needing this much work in Texas and I am in CA. It just makes more sense to get a home that is rental ready. HOWEVER, I am huge on educating myself, and this is a good opportunity to do so with foundation work and minor repairs. Then for the next opportunity I can get a home with foundation issues that I will know how to handle, and get at steep discounts since competition will be lower. 

Decisions decisions.

@Mark Forest

Yes I got the inside scoop from the homeowners as they WANT me to have the house if they were going to lose it anyway. So they were very honest and told me everything and they sent me the first actual foundation quote that was $11K, then I wanted to be safe so I had a second company with a smaller name but better reputation out there and their quote was $14K. 

@Wayne Brooks

Ok I feel a little better now because I was thinking "How in the world have I never even heard of a G quote?"

Ok so I have the official foundation quote that the homeowner sent me for $14K. I don't have a GC quote however. The bank knew about the $11K quote already and wouldn't change their price. So maybe they won't budge even if I show them the $14K foundation quote.

@Wayne Brooks 

Excuse my ignorance, but do you have more info on a "G Quote"? I will tell the SS realtor to do that, I just want to be more educated about it. 

Thanks for all your responses.

Hello fellow BP Members!

I have a potential Short Sale that is mine if I want it. I initiated it, worked with an agent, and now I am here...Here are the numbers. My intention is to buy and hold. Homes are appreciating in the area. 

2 Story , 3BR 2BA, 2300 sq ft

Austin, TX area

Comps coming in at about $175-195K

Rents at about $1550-$1600

House needs $14K of foundation repair

I estimate another $6-8K for collateral damage and minor repairs to make rent ready

Foundation engineer says home is structurally sound and safe to live in, but wouldn't say how long. 

Bank's lowest acceptable offer - $125,500

Thoughts?

I'm torn. The foundation repair is killer, and the bank apparently won't budge, but I haven't talked to them yet, just the agent. If I show them the estimate with a $14K foundation issue on their hands, I'm hoping they will lower the price $8K or so. I stopped a foreclosure and there are NO offers on the property besides mine. If they don't accept my offer they will sell on courthouse steps. 

@Al Williamson 

Understood and much appreciated Al. I'm getting a second quote done next week and depending on what they say, I may have to just bite the bullet and get it done now. I've been told it's 50/50 we can save the flooring downstairs anyway, and if we can't save it I think now would be the time to do the foundation right? Just doesn't seem to make sense to put in new flooring that may last 7-10 years, and have to do the foundation in 5 and tear the floor up. I guess I could always put in CHEAP but decent looking carpet that may only last 3-5 years.