I`m working on a deal that is a little odd in my opinion and I am looking for some input from someone who has DONE something similar to this.
I Got a beautiful well equipped home that is up side down by about 50k. Mort $406k appraisal $353k market value $360k and my offer of 335K to be accepted.
Genworth is the insurer and is willing to be very cooperative with the owner as the owners have split up and the house will be empty at the end of the month. Their options are foreclosure or sell the house and pay on 70k back to genworth that will be the shortfall after selling the house and paying commissions. Obviously Genworth will be flexible on this, it smells of foreclosure. What I was thinking was I get my built-in equity with my purchase price of 335k and today`s market value of 360k. I would place a tenant buyer in the property for a min two year term, helping mortgage pay down and splitting market appreciation 50/50 on anything over the 353k appraisal until the property is sold to the end buyer. Over three years the outstanding debt would go from 70k to 30k using only 3% / year of appreciation. After looking at it again, it`s more like a JV, they hold the mortgage I manage and we split the appreciation, But I`m going in with built-in equity of 18k. HOW would you structure this? JV, AFS, or something else? I will be talking with Genworth on Thurs to see what flexibility I can get, any advice on this for experienced members. Cheers Joel
I Got a beautiful well equipped home that is up side down by about 50k. Mort $406k appraisal $353k market value $360k and my offer of 335K to be accepted.
Genworth is the insurer and is willing to be very cooperative with the owner as the owners have split up and the house will be empty at the end of the month. Their options are foreclosure or sell the house and pay on 70k back to genworth that will be the shortfall after selling the house and paying commissions. Obviously Genworth will be flexible on this, it smells of foreclosure. What I was thinking was I get my built-in equity with my purchase price of 335k and today`s market value of 360k. I would place a tenant buyer in the property for a min two year term, helping mortgage pay down and splitting market appreciation 50/50 on anything over the 353k appraisal until the property is sold to the end buyer. Over three years the outstanding debt would go from 70k to 30k using only 3% / year of appreciation. After looking at it again, it`s more like a JV, they hold the mortgage I manage and we split the appreciation, But I`m going in with built-in equity of 18k. HOW would you structure this? JV, AFS, or something else? I will be talking with Genworth on Thurs to see what flexibility I can get, any advice on this for experienced members. Cheers Joel