can money be made with these deals?

[verbatim 1]

Hi all!!

 

deal 1: Owes 80k, worth 80, and she doesnt want it. she says payments are current but she's living check to check and feels she may not be able to keep current for longer than a few months.

 

I told her i can lease from her if she's comfortable with it staying in her name until tenant qualifies for financing.

 

Average rent: unknown

 

her mortgage: $740

 

 

 

deal 2: wife in process of divorcing & says husband will sign any papers. She bought 2yearss ago, owes 90, worth 90, has been listed for 1 year and realtor told her that with the foreclosures folks arent buying and she'd have to come up with 5-7k for realtor commission and closing costs.

 

She has an interest only heloc of which 87 of the 90 is used. The payments are currently 500 but fluctuate with prime of course. She has a tenant in it paying 900 /month whose lease is up in june. Has told me she'll "give it back to he bank if no one buys it.

 

 

 

what would you do in these situations?

 

any ideas offered would be greatly appreciated,

 

thanks

[MichaelC 160]

verbatim, deal 1 requires more info to be able to make an informed decision. The big question is what will the property rent for.

In both deals, obviously there isn't any equity. Not a deal killer, but you will have to get a long term lease option on either to make it worth your time. What you would be looking for is a minimum of 36 months. Longer is better. During that time if the market turns back to the upside, any appreciation that occurs would be your's. In the meantime, there needs to be cashflow each month to make the deal sustainable for you. Other than that, I don't see much there for you.

[verbatim 1]

verbatim, deal 1 requires more info to be able to make an informed decision. The big question is what will the property rent for.

In both deals, obviously there isn't any equity. Not a deal killer, but you will have to get a long term lease option on either to make it worth your time. What you would be looking for is a minimum of 36 months. Longer is better. During that time if the market turns back to the upside, any appreciation that occurs would be your's. In the meantime, there needs to be cashflow each month to make the deal sustainable for you. Other than that, I don't see much there for you.

 

Thanks for the reply, I was thinking the same thing except maybe doing a coop assign on deal 1 but I'm not sure if people will put a few thousand down on a home they'll have to pay 100% value for when they get financed later with no rent credits?

 

Deal 2 seems to have cashflow & MAY be worth leasing for 36 buit this may become unattractive later depending on prime.

[Brian - L.V. 0]

Deal 2 seems to have cashflow & MAY be worth leasing for 36 buit this may become unattractive later depending on prime.

That would be a potential concern, but worst case it's not like you can't cancel your option in the future if your cashflow heads south.

 

I told her i can lease from her if she's comfortable with it staying in her name until tenant qualifies for financing.

Next time, I wouldn't frame it in a "if you're comfortable" sort of way because it implies that she shouldn't be comfortable with the situation. If you explain the way everything works in a matter of fact tone, it tends to smooth over most concerns homeowners have because it seems like you've successfully done this type of thing a thousand times. Minor point, but little things like that can kill deals. Hope it helps!