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Investor Alert!
I wrote an article about short sales and then a real estate friend of mine (and reader of the ashlar undressed blog) called me with a deal. A deal is something that makes sense to buy with the prospect of making a profit.
One of the things to look for when buying an investment property in a short sale situation is a large 2nd mortgage. Today mortgage companies in 2nd position are taking between $1,000 and $3,000, regardless of the amount owed on the 2nd. Really the 1st mortgage simply tells the 2nd what to do.
This morning my friend sent over a house that has a $145k 2nd with a $160k first. This means that at one time a lending institution valued the homes at a minimum of $300,000. If the 2nd mortgage were to take $3,000 and the first was paid 90% (which they would likely take) and investor could pick the house in the $150,000 range.
Please note that the entire transaction depends on the decision of the bank. Working with professional bank negotiators is critical to making this transaction work for the investor. I know the house and it would yield between $1,100 and $1,300 a month in rent.
Good Investment? What are your thoughts?
