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Met with a motivated seller recently. They are way behind on all bills including their mortgage. They have been behind for a while and haven’t addressed the issue so a foreclosure judgment has been filed and the home is set to sell at auction first week of October. We met with them and got a contract to purchase the home before the auction date.
Value 105k
Price tag is 67k
1st mortgage payoff about 60k – with all fees and interest included
IRS lien for 1800
State lien of 500
Also a CC lien 8k – this will be released from the home because it is a homestead property in FL. But the seller wants to try to get this paid off with any proceeds from the sale.They signed an authorization to have the mortgage holder/ lender and CC debt collector work with us and give information about their accounts. We want this to be a win-win so even though the CC lien won’t attach to the property how can we help get it negotiated and paid off with any proceeds from the sale?
We were thinking of putting the owner in contact with a company that specializes in this and letting them handle that piece.
We also are going to try to get the mortgage holder to take a reduced payoff. Any tips for this? Time is working against us as we have about a month.Basically the seller knows the worst case scenario is they don’t get any proceeds from the sale but the lenders judgment and IRS lien will be paid off and cleared. The best case is both those liens and the CC debt is cleared plus a few thousand in their pocket to help them restart. I imagine we’ll land somewhere in the middle. Any suggestions on how to set this up for success?
Thanks fellow Cash Flow investors!
you probably will not get the mortgage company to take less
instead of paying off the mortgage, would it be less out of pocket expense if you buy it subject to the mortgage?
what would it take to bring the loan current?
you should be able to get the CC to $4k maybe less.
the IRS and state will usually not negotiate less.
Thank you for the feedback. Agreed, on getting the mortgage co to take less. Its not likely with the potential equity and the limited time till auction date. I’ll stop wasting time on that.
The challenge with taking over the mortgage is it has a very high rate, more than 20% interest. I’ll work on the CC debt.
I also may wholesale the deal, but wondering what the best way to handle that is. Assignment fee? Put the property in a land trust and sell the BI? Have the owner put the property in a land trust prior to sale then assign the BI to my llc, then sell the BI?I’m not sure if there is a benefit to keeping the sale price private.
this is a skinny wholesale deal, and because there are other liens,it would be better to LAY ALL THE DETAILS OUT so the buyer can make an informed decision.
who is the mortgage company? You may be able to get them to reduce the interest rate if you bring the loan current.
get an authorization to verify that it is really 20%
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