In addition, certain strategies can be altered or modified in a way that a less experienced real estate investor might not be aware of, or may not have even considered.

His bank gave him an offer to modify it to 8% and add all the late payments and penalties into a new mortgage amount.

just stop making payments; it will take them 3-5 months to initiate foreclosure ( it starts with " notice of default"); but in the meanwhile congress will passs the BAILOUT; then uncle sam will buy your " toxic" note for something like 30 cents on a dollar; after that - most likely - uncle sam will " modify" your loan ( how'bout zero interest plus knocking off 65% of principal - would'n you make that kind of payment ?)

I agree loan mod's do not work, first of all most are not "modifing the loan" what they are doing is lowering the interest rate and payment and making the rate fixed for a priod of time (2yrs, 4yrs or even 5) the majority of this loan mod's the principal still stays the same so if person owed 600K on thier home they will still owe 600K at the end of thier agreement, now what about property taxes as far as I know you can not "modify property taxes" when a lender agrees to a loan mod. they will now include an escrow account and the homeower will now have a much higher payment with a new lower interest rate, what does this mean to all of us more short sales, now one thing I have not seen discussed here is the Mortgage Relief Act this is very important to keep in mind, according to the IRS this will end on December 2010, so let's a homeower can get a loan mod in 2008 and he loss his or job in 2011 the IRS says now you will get a 1099 for difference of what you bought to what the bank took it back at, what does this mean the howeower would have been better to have completed a short sale in 2008 so that could qualify not to pay taxes on the 1099 they got.

I look forward to hearing of your progress in this industry.You can click on "EDIT" I believe and modify that type-o.Good luck to you and welcome aboard!

Better to deal with it now, short sell or work with the bank to modify, than just have it foreclose.

Chris J there is no real need to modify the formula as it is important for comparison reason and back of the napkin calculations. and there are so many other things to consider when analyzing a property.

You could try using several different modified forms of the IRR though I prefer to use Net Present Value and a Profitability Index.

Section A to be Deleted, and Section A now reads:insert (at lines 56+): At completion of closing with a qualified buyer purchasing the Premises according to the terms and conditions of this Agreement or upon such other price and/or terms as subsequently agreed to by Seller, Section B modified to add 60. section B: I'm not real comfortable with B.

Alternatively, you can scour the internet and find yourself some contracts that others have used and then modify them to your needs.