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ErikOk

Houses with zero or negative equity

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What have you all done with houses that have zero equity or worse are actually worth less than what is owed?

 

Say a house is worth $200,000 but has mortgages of $220,000. I have heard of some folks still doing a LO on it for a long term and the purchase price is the loan balance at the time the option is exercised. This way (hopefully) the equity has a chance to catch up and the loan balance is able to be mortgaged by the buyer.

 

Have any of you done this or different techniques to deal with those houses that are under water?

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I don't do properties that are upside down. Just because I would not be able to move them. If everything is disclosed and all parties agree to the risk/reward sounds like a deal.

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Erik, I avoid deals with upside down financing. For me at least, that is an invitation to problems down the road, possibly a law suit from a disgruntled t/b who will claim you and the homeowner conspired to screw him over. Why take on that kind of headache when there are less cumbersome deals to be had?

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Refer it to an investor who does short sales. Tell him (or her) that you want a finder's fee when it closes...a year later.

 

Lynn (FL)

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Refer it to an investor who does short sales. Tell him (or her) that you want a finder's fee when it closes...a year later.

 

Lynn (FL)

:P

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hmmm...

 

We offer them on terms and sell them...

 

Tons of buyers in this market looking for deals...

and if the numbers are right... ie.. the interest

rate is lower... You can still make money on the front

and back end... by creating a wraparound loan...

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David, could you give us an example of how upside down someone can be and you're still able to work with them? Say, for example on a $150,000 house? Also, how much down, length of mortgage, and what interest rate are your Buyers willing to pay? Thanks!

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