All Forum Posts by: Edward Prochilo

I'm having the same issue all of a sudden. Have you had it corrected yet?

@Alexander Felice

You are probably right. I just get fixated on trying to help the seller. I also have a bad habit of complicating the simple things. 

Thanks for the help everybody!

BTW, how do I reference somebody in a post so it alerts them that they are mentioned? I've been typing it out.  I haven't figured that part out yet. 

@Darrell Shepherd

Thanks for the input! The LO is actually my plan B. I don't want to just walk in that situation because I want to protect both my seller and buyer so it would be a sandwich LO. I figured if I was going to do all that I might just assume the mortgage and keep the property as a rental. The price is kind of inconsequential because the renter would be paying for it, not me.  They would be paying down the mortgage, the property should appreciate nicely (hopefully back to the 120 range) and then I'll have a good amount of equity to leverage or cash out, and I've helped the seller.  That's my thinking anyway. Does that make sense?

Oh, the mortgage is held by a mortgage company called osweco? Or something like that. I haven't had a chance to research them yet. 

@Wayne Brooks

Thanks. I will look for that online. He got the mortgage around '04 so I'm thinking he has a little higher rate. He's not an investor, just the homeowner in a bad situation. I'm not concerned about the rate but the total payment. At $750 PITI there's not much room to play with to make it a rental. He owes about $93k on the $120k mortgage, which (the $93k) is right at or slightly more than the property is worth today. A good rehab might push the value to $105k so that's not worth doing. I know refinancing the $93k should bring the PITI to about $600/mo and as is it should rent in the upper 900 range and give me $75 to $100 monthly cashflow (please let me know if I'm off somewhere and those numbers don't make sense). I know assumptions are a rare case but the HO says it can be assumed. I have not looked over his actual mortgage contract yet (I just talked to him yesterday for the first time and this is my first possible solution), but it will be easy to verify whether it can or cannot be assumed.

Hi BP,

I could use some advice. I talked to a seller who is upside down in his property and now 2 months behind on mortgage payments (about $1500). He just wants out to save his credit. 

The mortgage company is offering to move the missed payments to the end of the term if he sends them $200. They don't want to foreclose. He can't do that at this point because of the divorce he is going through, he can't afford the property and doesn't want to landlord. 

The property is in great shape: roof is 10 years old in excellent shape, updated electrical, new HVAC etc. It just needs a few cosmetic fixes but is basically rent ready once he clears everything out. It would make a great rental but not with the current payment. The loan can be assumed. 

How do I go about negotiating with the finance company for me to assume the loan and have them refinance it so the payment will make sense to take it on as a rental and provide positive cashflow? Can I just call them or have the seller call them and have them call me? Does there need to be some kind of paperwork in place? Any help is appreciated.  

I think I understand the basics of how OF works with contract for deed, Sub2, and LO. My question is about who pays (and therefore also claims on income taxes) insurance, interest, and property taxes in each of these strategies. If it is the buyer, how do you change over the escrow without triggering the DOS clause, since the bank is usually controlling the escrow account? If the seller has to change to a non-occupant owner, that will change all the numbers for taxes and ins. How do you account for that in your deal calculations?

I know this isn't exactly the kind of answer you're looking for but, this is what I've been taught. It's more a general answer without regard for the actual numbers. Give them multiple offers that all work for you and let them choose the one they prefer. Usually three offers, one cash, 2 different terms. If none work it's either not a deal or you might be close on one and can negotiate further from there. People like choices and if they pick what they get they'll be much happier about the deal. Hope that helps a little. -Ed