First Foreclosure Deal Help!
I have been giving a foreclosure opportunity with the friend of the family. The deal is stated below:
Recently the family mothers passed and the daughter now lives in the house and she and her sister would like to keep the house but cannot because both of them have lost their jobs and could not make the mortgage payments. The house is worth 50,000 the payoff amount is 11,000. How can I strucutre this deal so that I can get the house from them and then rent the house back to them? I am knew to the foreclosure process so please instruct me if this is a good deal I really want to help the family keep the house but I want to make sure I will make money also. Thanks
well this is what i would do
first and foremost i would have them deed the property into trust with me as trustee and my business as benificiary. Then i would make up the back payments on the existing loan and bring it current. from there i would put it on the mrk and sell it. in your case, you want to rent it out. So make them give you a deposit and rent it to them. for 10 grand i would buy that thing in a second and just pay the loan off to be honest with you.
Thanks thats a big help but I have one more question and I just want to make sure that I am right.
1. I will get the family to transfer the property to me with a deed and now the property is in my name.
2. Then I will get a loan for the payoff amount and payoff the 11,000 to the mortgage company
3. Since I own the house now I will rent out the house for lets say $500 per month and payoff the loan and then sell the house.
Is this how the foreclosure process works.
I
1. have a question what about the 50,000 loan amount is the house actually mine what happens with the entire loan?
2. Since the house is going up for auction by the City and attorneys are involved I was told it is to late to do a quick claim deed or transfer the property to my name. Is this true? Can I transfer the property no matter how deep I am in the foreclosure process? I appreciate any help and thanks for everyone sharing knowledge with me.
since you are a novice, my advice would to ...
1) make sure the owners are OK with deeding you the property and you renting it back to them. Discuss the exact amount of rent and that if they do not make the rent you will have to get other tenants. Be VERY CLEAR.
2) Get a Real Estate Attorney involved NOW. Explain to him the urgency. He will take care of all the loose ends.
3) Find out where you can get 11k to bring the loan current and the money to pay the attorney.
Brenda
Just my opinion, but I dont think i would ever get into a situation (especially your first deal) that involves friends or family, thats just me. Maybe if i had 100 deals under my belt and could afford to get into a sticky situation i would. With a transaction where your leasing the house back to the original owners there is alot more chances of something going wrong.
I believe they have a "useury" law in California that prohibits someone to purchase a house from someone in foreclosure and lease it back to them. So you might want to check with a local lawyer to see if you will be ok. [ Edited by ZinOrganization on Date 10/26/2005 ]