All Forum Posts by: Sam M.

Once you own the property the taxes, insurance and mantainance is your bill.

You wrote above: "He has the property for sale at $300,000. 10% down and monthly payments of $2,000 for 24 months."

What happens on the 25th month?

I assume there is a balloon at the end of 24 months?

Um.....The idea of "cash for keys" is to spend some of the money it would take to do the foreclosure and "settle" without the long, arduous process of foreclosure.
A foreclosure attorney MIGHT be willing to be paid out of the final sale of the property after foreclosure but I think you might have to shop around to find an attorney who would do it.

Is the borrower unreasonable or has your friend burned some proverbial bridges with this person? They might even just turn over the keys without cash. Cash just gives you more bargaining power.

Are there any junior liens? If not then he might be more ahead to give them some cash to walk away. This would take some tact but might be worth it if the relationship is still cordial.

Donna Bauer teaches a method of short sales where she pitches a short sale then asks them if they would do an assignment. According to her claims she does about 70% of her deals as a short sale and 30% note purchase.

I don't think it would ever hurt to pitch the note purchase. What's the worst that can happen? They say no. I am used to people saying no but it never hurts to ask.

Sandy,
An investor might buy the note if the bank will sell the note at a a steeper discount than could be attained with a short sale. The bank will sometimes agree to a note assignment because it is less hassle than a short sale. The investor takes the risk of being forced to carry out a foreclosure if the homeowner will not deal. Most of the time there is an agreement in place to transfer deed if the note assignment is successful. The investor can then work out whatever he wants with the homeowner. That might be a reduction in principle and payments or it might just be to do cash for keys. It is fairly common though usually left for the bigger players.

The investor becomes the "lender" and is more likely to deal favorably with the seller than a shark...um, I mean bank.

Never trust the seller when they tell you the value, repair cost, "comps" or any other pertinent information about a property and or your business. The seller is nearly always self serving.
Case in point: My seller wanted 130k for a 3/2 that "needed 30k in repairs" and "would sell for 240k"
The trouble is my comps came in at 170k ARV with 50k in repairs with the home in it's current configuration but it really needed a garage, concrete driveway and some landscape work to bring it up to neighborhood standards. The comps would then only reach 209k with an additional 25k in upgrades.

I offered 65k almost a year ago. It is still for sale at 130k.

The lesson is that YOU must know your business.

The seller and yourself maintain control of the deal (fulfilling your fiduciary duty)due to your seller needing to agree/sign off on the approval letter received from the lenders. If there is some unsatisfactory wording or refusal to fully release the lien and or pursuit of judgment then the seller can just refuse to sign. The investor is going to do everything in his power to get an approval letter with favorable terms so that the seller will not just walk.

Sweet! Now maybe those of us who forget to look at the date won't respond to the OP like it was a fresh topic.....not sure who was doing that but just thought I'd mention it :)

If each unit has its own thermostat it is likely plumbed separate and will require minimal re-plumbing.
When it comes to boiler work it is best to hire someone who is a pro. A friend of mine runs a business strictly for fixing boiler messes. (meaning someone screwed up)