I Want To Help Help Pre-Foreclosure Owner Keep Property & Make Money
I came across a deal where the owner, a veteran, of a two-family property is being foreclosed on this month. He owes a principal amount of $124,000.00 and is in arrears $53,000.00. The market value (MV) is $265,000.00. To postpone the foreclosure the bank has offered that he pay a one time amount of $5,000.00 & $2,600.00/mth mortgage. The owner has made it very clear to me that he wants to keep his house. What I would like to do is pay the 53,000.00 in arrears to keep him current. Ask him for the $5,000.00 & 2,600.00, total of $7,600.00 he was going to pay his lender and also $500.00/mth for 3 – 5 years. I will have to get a loan for the $53,000.00. Another alternative is to buy the property for $177,000.00 and do a Lease to Purchase (L2P) where the money sits in an account that allows the seller to re-establish credit. Please help me structure this deal where the owner can keep the property and I can make some money.[ Edited by TDGroup on Date 01/04/2004 ]
Everyone in foreclosure wants to keep their house. Your job is to make him realize it's time to go. Unless he's willing to sell and move out, I'd move on to the next opportunity.
Do not try to be a good samaritan. This guy can not afford the house and will fall behind on payments again. 53k to catchup??? Geez, did he ever make a payment? Sounds like the guy is denying forclosure and will not give up his house. You could offer to buy it and do a LO but you will end up evicting him. Make sure that you get a CYA letter in his handwriting that he understands that you are buying the house and he is only a tenant. Be upfront when you are explaining it to him and make sure he understands that he will be evicted if he he does not pay his rents. Make sure that you have a good option and lease. The option needs to state that the option will be cancelled if the rent is every not paid in full by the 5th.
Brenda
Exactly! Alot of these homeowners are in denial. They want to keep their house.
If you structure a deal where you pay the mortgage, how can you be sure they won't stiff on you? They did it to the banks, along with their collection dept, attorneys, etc. You don't think you could be the next one they ignore?
I just went to a homeowner's house today, and she said she wants to work out something with the bank to pay the loan. It's difficult to discuss anything with these type of homeowners unless your solution involves them keeping the home. If you present anything different, they probably won't want to hear you out.
A technique I saw done by a fellow investor which may prove useful: Purchase the property and pay the seller to live somewhere nice for 2 years. This could be in one of your own rental units. Thats what this investor did. You then give him an option to purchase the home after 2 years.
This basically is a creative lease-option except that the lease and option are on different properties!
THOUGHTS??