All Forum Posts by: Rachel Trimble

Scenario:

70% ARV - repairs= purchase price

70%($190k)- $80k = $30k

Purchase price: $30k

Repairs: $80k

All in: $110k of cash purchase plus repairs.

Market rent for 3/1 in area: $1200

To BRRRR you want the appraised value to be 100x the market rent. This is the problem I'm encountering. If the bank will loan up to 75% LTV, the max cash out will be $47,500, correct? Therefore I won't recover my cash outlay. The new loan will be$142,500.

So, if we wanted to get all of our cash out it would have to be appraised much higher or require significantly less cash in repairs. This is why this would only make sense as a flip. Because even if I were willing to leave some cash equity in the deal, I would still be looking at a new ARV of $190k, so with a $1200 market rent rate, I won't be cash flowing.

Does anyone have a calculator or strategy for knowing when to BRRRR vs. straight up flip? I would like to hold on to my properties more long term, but if flipping make sense for these distressed properties, that may be what's best for right now.

There should be an equation to compare these 2 strategies. I'm just hoping there's a genius on here that's done the math! Thanks in advance for any help.

@Brett Goldsmith

The principal balance is $41k. All of the interest over past several years plus fees, etc. makes the total due $89.9k (including the $41k). 

Yes- I'm trying to offer under my name, and would flip this property.

What am I missing?

@Henry M.

The owner owes $41k and the bank quoted $89k for total payoff which includes the $41k and all the past interest, service fees, etc. 

The house is on the east side, in a gentrifying area. The ARV is $190k.

70% ARV (70% $190k is $133k )- rehab ($90k) = max purchase price for flip ($43k).

BCAD has it appraised at $45k, the bank said the exterior eval 6 months ago was $40-$45k, and there is $41k loan balance. I'm thinking $35k could be doable?

This wouldn't work for a BRRRR cash out re-fi, since we would have $125k all in with purchase and rehab. They would only be able to finance 75% of the $190k ARV or $142,500 allowing only $42,500 back out (minus closing costs) of the total $125k we put in. Then with a new loan of $142,500 and ARV of $190k, the rents wouldn't justify the property as a rental. 1% rule of $190k is $1900 and this 3/1 would only rent for $1200 today.

I have a few more SS related questions:

1. At what point do I submit my offer? Do I first have owner sign my offer and then submit? Or do I wait until after the BPO? 

2. This house won't be financeable. Do I need to show proof of funds along with offer?

3. The bank told me they will find the seller's agent. Can I find one for them? If so, I suspect I can find a SS expert here on Bigger Pockets...

What else am I missing here?

I need help. I came across an owner who has abandoned the subject property and hasn't paid his mortgage since 2009. He told me he just wants out of it, wants nothing to do with it, wants to move on. 

Fast forward about 20 conversations with about 20 individuals at Citi Bank that have been a nightmare to communicate with...to today. The owner has given me authorization on his account so that I can deal directly with Citi. They said a short sale is best option and will have me meet with a BPOA at the property soon. They've slowly sent me the required docs to get the short sale approved, and I will work with the owner to hold his hand through all of this.  hey are getting a BPO (I'll be meeting the BPOA at property to escort them into the house through the only window that isn't boarded up) and assigning the short sale to an agent (I assume this will happen AFTER I provide all paperwork etc. and this gets approved as a short sale)??? . I plan on making the work easy for the BPOA by running all the comps, taking pictures, etc. basically doing the work for them.

 I keep hearing that NET is the most important to a bank, but I can't imagine how they could possibly net. It's also a strange scenario as the bank didn't initiate the short sale or foreclosure for that matter. I approached them. Do you have any tips at how to go about this? Any tips on how to get ahead of the curve here? And influence the path this takes? I am lost...need help navigating!

Scenario:

-Owner abandoned house in 2009 and hasn't paid mortgage since. 

House is destroyed, all but falling over. Citi told me the exterior was evaluated at between $40k-$45k. (this may be advantageous info. as the interior is 10x worse than outside). I wouldn't say it's worth even close to the $41 that he owes or the $40-$45k exterior eval amount. 

-Owes $41k in remaining principal due and a total of $89,908 for all the past interest, unpaid taxes, etc. due. 

I could use some advice on the paperwork: One of the forms is a "Uniform Borrower Assistance Form". To fill this out in my advantage, what should I select for the "I want to" line item? The options are: a. Keep the property (no, owner wants nothing to do w/ it),

b. Vacate the property (owner has already done this, it's been abandoned for 5 + years)

c. Sell the property (he wants to walk away. so what's the difference between vacate and sell?)

d. Undecided

Another question on the Hardship Affidavit-is there one hardship that is the best to check, making this any easier? I'm leaning towards the "reduction in income" selection as it's true and it doesn't require hardship documentation....

Is there high risk that this won't be approved for a short sale because of the condition of the house? After reading some notes here on BP I'm starting to wonder if this is going to quickly turn onto a foreclosure. Are there reasons why banks would go for foreclosure over short sale in cases like this? I just don't want to continue spending so much time here, only for Citi to take it to auction.

As you can see- I need all the help I can get here... Thank you so much in advance to anyone who is willing to reply. :) 

@Henry M. You sound like you know what you're doing.

Can you help me out with the below scenario? I keep hearing that NET is the most important to a bank, but I can't imagine how they could possibly net. It's also a strange scenario as the bank didn't initiate the short sale or foreclosure for that matter. The owner hasn't paid mortgage in about 5 years, after vacating the property. It's destroyed. Do you have any tips at how to go about this? I found the owner and we called the bank together to talk through our options. I'm now authorized on his account and have been the one communicating with Citi Bank. Any tips on how to get ahead of the curve here? And influence the path this takes? I am lost...

Scenario below:

I met someone who has abandoned his house and mortgage. I have no idea how this slipped through the cracks and didn't foreclose...but it didn't. I've been dealing with Citi Bank, telling them the owner wants to give me the house, as he wants nothing to do with it. He owes $41k in remaining principal due and a total of $89,908 for all the past interest, unpaid taxes, etc. due. The house is all but falling over. It's not work even $25k. The bank got me started on paperwork to move through the process as a short sale. I wish we could settle, but this is what they say must happen. They are getting a BPO (I'll be meeting the BPOA at property to escort them into the house through the only window that isn't boarded up) and assigning the short sale to an agent. I plan on making the work easy for the BPOA by running all the comps, taking pictures, etc. basically doing the work for them. Citi wants me to work with them to help the seller fill out his paperwork, etc. One of the forms is a "Uniform Borrower Assistance Form". To fill this out in my advantage, what should I select for the "I want to" line item? The options are: a. Keep the property (no, owner wants nothing to do w/ it),

b. Vacate the property (owner has already done this, it's been abandoned for 5 + years)

c. Sell the property (he wants to walk away. so what's the difference between vacate and sell?)

d. Undecided

Owner just wants to get his name unattached from this house and move on, and I am trying to make it as painless as possible for him. From a bank's perspective, what would be the best option here? Remember, he owes $41k principal, $89k total balance, and the property is worth less than $35k.

The deal is basically between me an the bank, but I am assisting the homeowner.with the paperwork.  It's total handholding and he made me an authorized user on his account. Am I making any sense here? Is there high risk that this won't be approved for a short sale because of the condition of the house? I just don't understand why the bank would take it to foreclosure if I'm willing to make a reasonable offer at $30k with a remaining principal owed of $41k. After reading some notes here on BP I'm starting to wonder if this is going to quickly turn onto a foreclosure. Are there reasons why banks would go for foreclosure over short sale in cases like this? I just don't want to continue spending so much time here, only for Citi to take it to auction.

Another question on the Hardship Affidavit-is there one hardship that is the best to check, making this any easier? I'm leaning towards the "reduction in income" selection as it's true and it doesn't require hardship documentation....

As you can see- I need all the help I can get here... Thank you so much in advance to anyone who is willing to reply. :) 

@Brian Gibbons you sound like you know what you're doing. 

Can you help me out with the below scenario? I keep hearing that NET is the most important to a bank, but I can't imagine how they could possibly net. It's also a strange scenario as the bank didn't initiate the short sale or foreclosure for that matter. The owner hasn't paid mortgage in about 5 years, after vacating the property. It's destroyed. Do you have any tips at how to go about this? I found the owner and we called the bank together to talk through our options. I'm now authorized on his account and have been the one communicating with Citi Bank. Any tips on how to get ahead of the curve here? And influence the path this takes? I am lost...

Scenario below:

I met someone who has abandoned his house and mortgage. I have no idea how this slipped through the cracks and didn't foreclose...but it didn't. I've been dealing with Citi Bank, telling them the owner wants to give me the house, as he wants nothing to do with it. He owes $41k in remaining principal due and a total of $89,908 for all the past interest, unpaid taxes, etc. due. The house is all but falling over. It's not work even $25k. The bank got me started on paperwork to move through the process as a short sale. I wish we could settle, but this is what they say must happen. They are getting a BPO (I'll be meeting the BPOA at property to escort them into the house through the only window that isn't boarded up) and assigning the short sale to an agent. I plan on making the work easy for the BPOA by running all the comps, taking pictures, etc. basically doing the work for them. Citi wants me to work with them to help the seller fill out his paperwork, etc. One of the forms is a "Uniform Borrower Assistance Form". To fill this out in my advantage, what should I select for the "I want to" line item? The options are: a. Keep the property (no, owner wants nothing to do w/ it),

b. Vacate the property (owner has already done this, it's been abandoned for 5 + years)

c. Sell the property (he wants to walk away. so what's the difference between vacate and sell?)

d. Undecided

Owner just wants to get his name unattached from this house and move on, and I am trying to make it as painless as possible for him. From a bank's perspective, what would be the best option here? Remember, he owes $41k principal, $89k total balance, and the property is worth less than $35k.

The deal is basically between me an the bank, but I am assisting the homeowner.with the paperwork. Am I making any sense here? Is there high risk that this won't be approved for a short sale because of the condition of the house? I just don't understand why the bank would take it to foreclosure if I'm willing to make a reasonable offer at $30k with a remaining principal owed of $41k. After reading some notes here on BP I'm starting to wonder if this is going to quickly turn onto a foreclosure. Are there reasons why banks would go for foreclosure over short sale in cases like this? I just don't want to continue spending so much time here, only for Citi to take it to auction. 

Another question on the Hardship Affidavit-is there one hardship that is the best to check, making this any easier? I'm leaning towards the "reduction in income" selection as it's true and it doesn't require hardship documentation....

As you can see- I need all the help I can get here... Thank you so much in advance to anyone who is willing to reply. :) 

@Brett Goldsmith You sound like you know what you're doing. Can you help me out with the below scenario? I keep hearing that NET is the most important to a bank, but I can't imagine how they could possibly net. It's also a strange scenario as the bank didn't initiate the short sale or foreclosure for that matter. The owner hasn't paid mortgage in about 5 years, after vacating the property. It's destroyed.  Do you have any tips at how to go about this? I found the owner and we called the bank together to talk through our options. I'm now authorized on his account and have been the one communicating with Citi Bank.  Any tips on how to get ahead of the curve here? And influence the path this takes? I am lost...

Scenario below:

I met someone who has abandoned his house and mortgage. I have no idea how this slipped through the cracks and didn't foreclose...but it didn't. I've been dealing with Citi Bank, telling them the owner wants to give me the house, as he wants nothing to do with it. He owes $41k in remaining principal due and a total of $89,908 for all the past interest, unpaid taxes, etc. due. The house is all but falling over. It's not work even $25k. The bank got me started on paperwork to move through the process as a short sale. I wish we could settle, but this is what they say must happen. They are getting a BPO and assigning the short sale to an agent. They want me to work with them to help the seller fill out his paperwork, etc. One of the forms is a "Uniform Borrower Assistance Form". To fill this out in my advantage, what should I select for the "I want to" line item? The options are: a. Keep the property (no, owner wants nothing to do w/ it),

b. Vacate the property (owner has already done this, it's been abandoned for 5 + years)

c. Sell the property (he wants to walk away. so what's the difference between vacate and sell?)

d. Undecided

Owner just wants to get his name unattached from this house and move on, and I am trying to make it as painless as possible for him. From a bank's perspective, what would be the best option here? Remember, he owes $41k principal, $89k total balance, and the property is worth less than $35k.

The deal is basically between me an the bank, but I am assisting the homeowner. It's not a scenario where he can even really short sell it for $$, as it is so far gone. Am I making any sense here?

Another question: if the house is destroyed and not financeable, can I use this to my advantage by coming to the table with a cash offer? 

Please also see scenario below and advise. I have no clue how to best work with a bank in this scenario...

I met someone who has abandoned his house and mortgage. I have no idea how this slipped through the cracks and didn't foreclose...but it didn't. I've been dealing with Citi Bank, telling them the owner wants to give me the house, as he wants nothing to do with it. He owes $41k in remaining principal due and a total of $89,908 for all the past interest, unpaid taxes, etc. due. The house is all but falling over. It's not work even $25k. The bank got me started on paperwork to move through the process as a short sale. I wish we could settle, but this is what they say must happen. They are getting a BPO and assigning the short sale to an agent. They want me to work with them to help the seller fill out his paperwork, etc. One of the forms is a "Uniform Borrower Assistance Form". To fill this out in my advantage, what should I select for the "I want to" line item? The options are: a. Keep the property (no, owner wants nothing to do w/ it),

b. Vacate the property (owner has already done this, it's been abandoned for 5 + years)

c. Sell the property (he wants to walk away. so what's the difference between vacate and sell?)

d. Undecided

Owner just wants to get his name unattached from this house and move on, and I am trying to make it as painless as possible for him. From a bank's perspective, what would be the best option here? Remember, he owes $41k principal, $89k total balance, and the property is worth less than $35k.

The deal is basically between me an the bank, but I am assisting the homeowner. It's not a scenario where he can even really short sell it for $$, as it is so far gone. Am I making any sense here?

I have a question: I met someone who has abandoned his house and mortgage. I have no idea how this slipped through the cracks and didn't foreclose...but it didn't. I've been dealing with Citi Bank, telling them the owner wants to give me the house, as he wants nothing to do with it. He owes $41k in remaining principal due and a total of $89,908 for all the past interest, unpaid taxes, etc. due. The house is all but falling over. It's not work even $25k. The bank got me started on paperwork to move through the process as a short sale. I wish we could settle, but this is what they say must happen. They are getting a BPO and assigning the short sale to an agent. They want me to work with them to help the seller fill out his paperwork, etc. One of the forms is a "Uniform Borrower Assistance Form". To fill this out in my advantage, what should I select for the "I want to" line item? The options are: a. Keep the property (no, owner wants nothing to do w/ it), 

b. Vacate the property (owner has already done this, it's been abandoned for 5 + years)

c. Sell the property (he wants to walk away. so what's the difference between vacate and sell?)

d. Undecided

Owner just wants to get his name unattached from this house and move on, and I am trying to make it as painless as possible for him. From a bank's perspective, what would be the best option here? Remember, he owes $41k principal, $89k total balance, and the property is worth less than $35k. 

The deal is basically between me an the bank, but I am assisting the homeowner. It's not a scenario where he can even really short sell it for $$, as it is so far gone. Am I making any sense here?