Hello Mustachians,
I need some help in solving a truly bizarre situation.
8 Years ago I was leading the country and sold a 4 unit home to my dad. Sold isn’t quite the right word. I quit claimed the deed to him and went overseas. While in Tonga I found out that he never refinanced it and was defaulting on the mortgage and took out an additional note against is with a private party. Despite numbers attempts at resolving this issue, it never got any better. My father passed away in Feb ’13 and a year later, the estate owns the deed, I still owe the bank, taxes haven’t been paid in two years, there’s still a second lean holder on the house and all the utilities are about to be shut off and tenants moving out.
Fun huh?
In many ways, I would just like to be rid of it and done. But, I just keep trying to figure out how to salvage it and turn it into an asset. This is where I’m hoping for some advice. Here’s the situation as it stands.
$92,000 Loan to the bank
$50,000 Private loan
$8,000 Back Taxes
$5,000 Repairs and maintenance
$155,000 Total
The appraisal we just had done came in at $140k. Now you see why I just want to let it go. However the private party that’s owed $50k is willing to discount half of what she’s owed if we rewrite the note in my name. This drops the total the house would need to $130k. Now, I don’t have much cash in the bank to work with so the bank will add the $ for taxes and repairs to their note. If I’m thinking about this right, this will get me into owning a 4plex with no money down, a note for $105 to the bank and $25 to a private party? I’m not sure the interest rates yet and can post them tomorrow after I talk to the bank. The income on them would be $3,300 and the combined payments should be about $900.
So, please ask me some questions or send me some thoughts. Any and all would be appreciated since I have to make a decision in the next week or the deed will be going back to the bank.
Thanks,
Jason