Newbie Needs HELP.....

[wealthoasis]

I`ve a property on hand which I`m at a loss as to how to package it. It`s a foreclosure. 1st Mtge @ $259k (paying $1901/mth @ 7.25%), 2nd mtge @ $10k (visa 11.99%) & 3rd Mtge $32,500 (PLC 12% paying $300/mth). Property was valued at $551k (2008 assessment). Tax $3141.16/yr and utilities $708.75/yr. Owner just lost common law and was behind 4mths on 1st mtge. She would like to keep property as she gets only Pension of $1700approx/mth. She didn`t think she could qualify for refinancing or a secured PLC. Son stays with her and is helping out with financing and there`s a basement suite that could be rented.---I`m thinking of a Rent to own....since family wants to stay at property....Any suggestions is much much appreciated..

 

[RedlineBrett]

Is the pension the only source of income she has?

She might like to stay but this is clearly too much house for her to handle.

What does the son pay for rent and what could the suite bring in?

QUOTE (wealthoasis @ Jul 3 2008, 11:10 PM) I`ve a property on hand which I`m at a loss as to how to package it. It`s a foreclosure. 1st Mtge @ $259k (paying $1901/mth @ 7.25%), 2nd mtge @ $10k (visa 11.99%) & 3rd Mtge $32,500 (PLC 12% paying $300/mth). Property was valued at $551k (2008 assessment). Tax $3141.16/yr and utilities $708.75/yr. Owner just lost common law and was behind 4mths on 1st mtge. She would like to keep property as she gets only Pension of $1700approx/mth. She didn`t think she could qualify for refinancing or a secured PLC. Son stays with her and is helping out with financing and there`s a basement suite that could be rented.---I`m thinking of a Rent to own....since family wants to stay at property....Any suggestions is much much appreciated..

 

[wealthoasis]

QUOTE (RedlineBrett @ Jul 4 2008, 08:00 AM) Is the pension the only source of income she has?

She might like to stay but this is clearly too much house for her to handle.

What does the son pay for rent and what could the suite bring in?


thanks Brett
suite could fetch $850. She`s also getting another $500 common law`s pension (he just pass away last week after long illness - which was the reason why they`re being foreclosured on)

 

[RedlineBrett]

What are her long term plans for housing?

Is she intending to stay in this house `till the end`? How long could that be?

She is getting killed by those high interest loans.

I work foreclosures quite extensively in Calgary. What we do in instances where the homeowner wants to stay in the property is a rent to own like you suggest, but they are tricky and not what I would reccomend for a skittish investor. You really have to want to work to make the deal happen in these cases.

That said, if you are up to it there is a win-win deal in here if she is willing to give up enough of her equity for the ability to remain in the property and have her monthly payments come down.

However, if you are going to get a desperate seller to sign a RTO agreement with you in my mind you have a moral responsibility to ensure they have the ability to buy it back from you for the terms you define.

That, or you need to have a mutually agreed-upon fall back option in the event she can`t close for the higher price in one to two years.

You also have to be able to look yourself in the mirror and tell yourself you have it in you to evict this woman if she stops paying.

When we are working with owners in foreclosure we give them two options - the RTO with the terms we need and also a `buy it now` option that helps them get into more affordable housing. She may want to stay in the property because it`s the easiest thing for her to do (and moving can be scary) but when faced with the economic reality it might be time for her to downsize.


QUOTE (wealthoasis @ Jul 4 2008, 10:46 AM) thanks Brett
suite could fetch $850. She`s also getting another $500 common law`s pension (he just pass away last week after long illness - which was the reason why they`re being foreclosured on)

 

[wealthoasis]

QUOTE (RedlineBrett @ Jul 4 2008, 10:06 AM) What are her long term plans for housing?

Is she intending to stay in this house `till the end`? How long could that be?

She is getting killed by those high interest loans.

I work foreclosures quite extensively in Calgary. What we do in instances where the homeowner wants to stay in the property is a rent to own like you suggest, but they are tricky and not what I would reccomend for a skittish investor. You really have to want to work to make the deal happen in these cases.

That said, if you are up to it there is a win-win deal in here if she is willing to give up enough of her equity for the ability to remain in the property and have her monthly payments come down.

However, if you are going to get a desperate seller to sign a RTO agreement with you in my mind you have a moral responsibility to ensure they have the ability to buy it back from you for the terms you define.

That, or you need to have a mutually agreed-upon fall back option in the event she can`t close for the higher price in one to two years.

You also have to be able to look yourself in the mirror and tell yourself you have it in you to evict this woman if she stops paying.

When we are working with owners in foreclosure we give them two options - the RTO with the terms we need and also a `buy it now` option that helps them get into more affordable housing. She may want to stay in the property because it`s the easiest thing for her to do (and moving can be scary) but when faced with the economic reality it might be time for her to downsize.

point noted Brett. Thanks
After 3 years, her son will add his name in the title. He`s currently staying there and also helping with the expenses. He just started on a new job and is not able to qualify for a mtge.