buying preforeclosure propertie !
iam in the process of buying a destress properties from an owner that he is loosing his house due to financials problems, his loan balance $76.000 the equity is about $22.000 the house value looks very promising to me . at this point iwill be getting an appraisal to asset the value very soon , my questions are 1/ how much time do i have in front of me to buy this house before it goes to auction at the court house ? knowing that the seller just received recently notice of default on his mortgage .2/ what's the raisonable offer should i give to the seller ? he repetedly told me that he doesn't want a foreclosure tobe recorded in his credit report. Any and all suggestions, comments and help is appreciated....
BUCS14: WELCOME to the TCI Family!
From what you stated in your post above--I'd say you have 6-8 weeks--depending on what State you are in.
Since this owner sounds VERY MOTIVATED I can suggest that you tie up his property A.S.A.P. with a 30 day option.(non-exclusive)
I always do this so as not to limit the owner's possibilities and keep them from asking for Big$ as Option consideration.
I do get an Authorization to Discuss form signed by them so that I may talk to their Lender about curing(paying current) the past due mortgage payments.
And at the time I discuss the defaulted loan w/the Lender, I ask them for a Forbearance Agreement or Debt Cancellation Contract, or Debt Substitution Agreement, or Modification Plan, or Work out plan---FANNI MAE is begining to Promote these (sometimes called-ROLLED IN Refinances).
If the Lenders say yes to my offer--I can then take over the property-Lease it out to a Tenant Buyer and make sure that the Owner/Seller is protected on our equity split arrangement(to keep thing legal).
You don't ever want to have someone to look back over your previous dealings and construe that you UNFAIRLY TOOK ADAVANTAGE OF A HOMEOWNER---Ya could wind up in the Pokey if some Zealous State Prosecutor mis-interprets your intetions
(read: arbitrarily decides that he doesn't like you nor ALL of your fancy Creative REI deals b/c you making all that money that he shoulda earned drafting Real Estate contracts for you!!!)
Anyway just make sure you agree to a Fair Mkt Value for the home then go find your Tenant/Buyer.
However; If you do plan to wholesale, then have the Owner to place it into a Land Trust and name you as either a Trustee or co-Beneficiary this way you can avoid re-sale scrutiny from your new Buyer's Lenders regarding You being SEASONED on the Title!
All the new Buyer's Lender will see is that the Troubled Owner place their home's Title into a Land Trust for Asset Protection purposes.
At the closing you either take the difference as a fee or beneficial interest for help Mr. Owner to SAVE HIS CREDIT!
Hope this Helps!
DERRICK ALI
[addsig]