Does This Sound Fishey??
I received a call from a homeowner in NJ that is in pre-foreclosure. He owes approx: 215k on the house and the bank is charging him 60 bucks a day on the note. The owner says that he has brought the note current but the only way he would have gotten my number is from my lis-pends mailing. The house is listed in a real estate for 470k they estimated the value of the house at 429-439k. The 470k number was suggested to test the market (they say). I negotiated a sale price of 350k with the owner. The owner said that he wants to sell me the house for 350k and live in the house for 4 months @2500 a month and than buy back the house for 395k. I can not think of a reason why he would want to do this and would like some suggestions and opinions from some of the more seasoned investors.
Thanks
John C.
I am definitely not the most seasoned investor on this site but I will chip in my 2 cents anyways. The crux of your question revolves around whether or not this person is legit in what he is proposing to you.
Right off the bat, I am not sure what he means about getting charged $60 a day for the note. I also do not understand that if he has brought everything current, why does he need you to buy his house only to sell it back to him 4 months later for 45k more?? Yes it does sound fishy, but if he is legit then it does sound like he is truly desperate to save at least some of the equity that he has in the house.
To answer your question for my viewpoint, yes it does sound fishy but there is the slimmest of chances that it could be legit.
You better be carefull with this. In some states there are buy back precidents in court cases that make a buy back a void transaction and give the house back to the original owner automatically and you lose everything. If there is a cash exchange on the equity thats one thing. Then it might be legit. If you are only making 9k not worth it. You need to tell me more
I suggest you talk to the guy further and dig into what his problems are. Is he having a temporary problem or is he just kidding himself about his ability to buy it back.
Keep it legal.
Focus on solving the problem.
I would be doubtful that 4 months is enough. It also seems the preson is confused if he claims he has brought the note current. If he can afford 45K in 4 months he could just not pay the note again and then bring it current again for less than 45K.
John
I think that leasing back property to an owner in foreclosure is a$$inine.
Develop your many preforeclosure hats: network so you can do foreclosure bailout loans, forbearance/loan mod agreements, short sales, buy the property with cash of sub2, etc.
Be the FORECLOSURE GUY, as opposed to just wanting to get the deed. Owners can smell sharks, and if they sense you are trying to steal their house, they will shut you out fast.
As for what this guy wants, if you steadily bring him through the options, STARTING WITH WHAT HE WANTS FIRST, then you have the greatest chance of either helping him out, or bringing him back to reality/motivated, and then you can show him how his two options are to sell the property to you, or stare out the window while the auction company comes by in the morning with their coffee and doughnuts and all he worked for goes up in smoke.
Good luck, let me know if I can help. - Dave