All Forum Posts by: Steve Saussier

Actually now that we are planning to go 50%-50%, we wouldn't involve the lender (Ocwen in this case).

We might sign a deed which would have a written consent that the 50% proceeds of this property would go to me.

Do you guys have any better idea which can be between me and the owner to share the property without bring Ocwen in the middle?

Lastly, do you think this deal makes sense for me financially?

Thanks.

We both would do the refinancing.

So the plan is that we'll become 50%-50% partners in the property and we both will refinance the property.

For refinancing, we'll need $80K; $40K would come from my side and $40K would be paid by him.

Furthermore, the profits from the rental income and/or expeses would be shared equally too.

what do you think?

Ok, a quick update. Upon hearing your advise, I decided not to go with this deal.

Thank you very much for this.

Here is another plan. I am still pondering over it and would be grateful of your advice.

What If I take a 50% stake in the property and 50% stays with the owner. We do that by refinancing the property to reduce the interest rate. Half the refinanced amount is paid by him and half of it is paid by me. (That comes out as $40,000 for each person).

The reduced interest rate would be 4% then and would bring the Mortgage payment to $2,000 from $3,300 (before tax).

Do you think it'd be a good investment decision for me?

Thanks.

So I guess it's a no from both of you ? :-(

Jon/Marie,

So I called this guy who do appraisals for living. So it was kinda formal process.

For Marie's property question, yes that market have lots of cash buyers. In fact the person who offered $440,000 was paying all cash. The party which offered $430,000 was putting down 20% which shaved off the difference between appraised value and the price.

I apologize for being a total amateur here and I really appreciate your comments.

With the above pointers, I feel this must be a good property for two offers in the first week.

Thanks.

Marie, Jon and Wayne,

Thank you all for your valuable comments.

I'll first clarify the difference between appraisal and the offers he is getting. In the area where this house is, it's not usual for the owners to demand higher price than the appraised value. Both of these offers are actually in as I've witnessed them myself. The fact that the house got two offers in its first week also makes me somewhat inclined towards it.

Your points make absolutely perfect sense to pass on to this loan. I just wished that if I can find someway to get hold of this property with some help in numbers. At the end, it's just a great property with immense negative equity on it.

Thank you Jon for your quick and elaborated reply.

I did call the lender and they confirmed that the mortgage is assumable. It's a residential property by the way. (A very well made three family house).

So, the interest rate wouldn't change during assumption. That's understood. And what If I refinance it, after the assumption, by putting around $70,000 down? Would that make sense?

The thing is that the property is at a very good location and I just hope that it makes sense to me through some way.

Also, the property is on sale and the owner has been offered $430,000 and $440,000 in two separate offers by the first week.

Thanks.

Hi,

First post here after reading amazing content by you guys.

I am thinking of assuming a mortgage by the owner in a city in NJ. The owner bought his house in 2002 with a normal interest rate but later refinanced it after taking out equity. This took his interest rate to a whooping 7%, due to which he is paying around $3300 before tax every month on his mortgage.

The remaining amount on his loan is $460,000.

Now, some pointers about the property.

• It's a multi-family property with a very good location.
• It is very close to NY, hence the commute is easy.
• It's a multi-family house with a combined rental income of around $4200 per month.
• The Lot is size is double than usual (compared to the average size of City).

Current monthly payments being paid by the owner:-

• As told before, the remaining loan amount is $460,000
• I've had appraisal done on the house, and it came out to be $390,000.
• Mortgage ($3300) + Tax ($1000) is $4300 every month.
• Water bill is around $150 every month.
• Insurance is around $100 every month.

Hence the owner is paying $4550 every month.

The current situation:-

• The Owner has this house on sale at the moment at $500,000. It's been one week and he got two offers. One was for $430,000 and the other one was $440,000.
• It's still on market.

Now, my question(s):-

• If I have this loan transferred over my name, would the interest rate be changed according to the current interest rate (4%)?
• If the interest rate doesn't change and I refinance the house, would they refinance it (without me putting any money down), keeping in view the current value of the house is lower than the loan on it?
• Do you think there is any way I can reduce the interest rate on it ?
• If the interest rate is lowered to 4%, the monthly payment of the house would be $2000 + Tax ($1000) + Insurance ($100) = $3100; give me a positive equity of $1100 from rentals. Do you think it'd be good deal then?

I'd appreciate any pointer, advice and feedback from you guys.

Best.