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I’ve had a seemingly perfect real estate deal fall in my lap. Tell me what you think of it.
The guy bought a studio condo (even smaller than my old 1-bedroom condo) for about $105K a year ago, put $50K down on a 15-year mortgage. The condo is less than 2 years old, and is in mostly good shape. At worst, I might need to replace the carpet and put in a little paint, but it’s such a small place, even a complete overhaul would be negligible compared to the equity.
Since then, he fell behind on his payments, somehow got the money to catch up without tapping his equity (I don’t know how), and subsequently lost his job a week ago. With his credit shot and no job, he can’t get a home equity loan, has no savings, and desperately wants out. He even seemed to be willing to settle for breaking even, if he just got out. The guy said he has a friend who is willing to rent a bedroom out to him until he gets back on his feet.
This deals sounds too good to be true. I know what I would want to do with the place and how to structure a deal. Are there any details that I’m forgetting about? I just want to make sure I’ve got all my bases covered.
Even in our poor real estate market, I would think that there is still a ton of equity in the place. I thought I heard somewhere that they changed the laws so that you cannot buy a property for less than 82% of FMV (whatever that is). IIRC, it had something to do with the change in foreclosure laws, though he's not in foreclosure yet. If it matters, the property is located in Illinois.
Thoughts?
Thank you for your help.
The guy bought a studio condo (even smaller than my old 1-bedroom condo) for about $105K a year ago, put $50K down on a 15-year mortgage. The condo is less than 2 years old, and is in mostly good shape. At worst, I might need to replace the carpet and put in a little paint, but it’s such a small place, even a complete overhaul would be negligible compared to the equity.
Since then, he fell behind on his payments, somehow got the money to catch up without tapping his equity (I don’t know how), and subsequently lost his job a week ago. With his credit shot and no job, he can’t get a home equity loan, has no savings, and desperately wants out. He even seemed to be willing to settle for breaking even, if he just got out. The guy said he has a friend who is willing to rent a bedroom out to him until he gets back on his feet.
This deals sounds too good to be true. I know what I would want to do with the place and how to structure a deal. Are there any details that I’m forgetting about? I just want to make sure I’ve got all my bases covered.
Even in our poor real estate market, I would think that there is still a ton of equity in the place. I thought I heard somewhere that they changed the laws so that you cannot buy a property for less than 82% of FMV (whatever that is). IIRC, it had something to do with the change in foreclosure laws, though he's not in foreclosure yet. If it matters, the property is located in Illinois.
Thoughts?
Thank you for your help.
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