What Should I Do

[naqueen]

I would never advise an investor to walk away from a possible $30k profit.

Even if you can make $10k it is $10k more than you started with.

I would just do a short sale as she is 3 months behind and it only takes four months delinquency to get started.

This way you can offer much less than $92k and make your profit margin greater. Start off offering a little more than 1/2 and let the bank bring you up.

You do not need money of your own to do this. All you need to do is find an end buyer and use transaction funds to close the first part of the deal and you sell it same day to your end buyer.

No money risk, only time. The time it takes to get short sale approval.

Good luck!

[askwhit]

I recommend you do a contract assignment. Offer to purchase the home for the price of what they owe. Market the property to other homeowners during your contract period. You can sale your contract for a fee and move on. Easy cut and dry no pressure. Always remember that when you are an investor you work on volume. 

[belaircorp]

I've done plenty of these deals and they are indeed profitable. You have the seller sign the deed over and sign a holdharmless disclosure stating you're not respnsible if the loan goes into further default and tell the seller that as an investor you plan to sell the property right away. (She's already 3 pmts behind) You check the title and then simply market it as a house for sale, no credit or banks needed. Believe me, the phone will ring.  Put it out for the 126K value but whoever calls with the most cash in hand gets the deed. Simple. Suppose you only collect 10K from a buyer who will take over payments? So what! Take the 10K and pay some bills and take your lady to the Bahamas.  (Don't forget to make up the back payments out of your profit when you buyer gives you their cashier's check) You're a lucky dog to get this deal. It's a slam dunk money maker!

[chunkoftheearth]

So 80-90% of respondants are saying what I'm saying essentially which is to do the deal, review your numbers carefully and get the experience.  The guy who posted 2 before me here said essentially to put under contract and simply assign it away.  I disagree with that completely, and here's why.  You have to consider that by the time that other person gets their financing in place, they close with lawyers etc, the numbers will be scewed for that person.  So the savvy people will figure it out.  Even if they don't, they will be stuck with a bad deal.  Not a good idea.  Furthermore it won't get the property sold quickly which is what is needed here, because you couldn't turn it around in any attractive way to get it sold quickly.  Something that is also not being said enough is, when you do a Sub2 deal (they way I do them at least), there is NO land transfer tax.  That is a huge reason to enter with Sub2.  People who don't know how to do it don't realize that's how the deals you pass on could make you money.  Because you save having to pay land transfer tax which sometimes can come up to a huge amount.